2000 (7) TMI 520 - AT - Central Excise

Summary

Issues:
Whether winding wires manufactured by the Respondents are eligible for exemption under Notfn. No. 69/86 as amended by Notfn. No. 106/88-C.E.

Detailed Analysis:
The common issue in the appeals by the Revenue was whether the winding wires made by the Respondents qualify for exemption under Notfn. No. 69/86. The Revenue argued that since the wires used by the Respondents were less than 6 mm in diameter, they did not meet the conditions of the notification. They cited a previous case to support their stance. Additionally, they highlighted the potential impact on the eligibility for Small Scale Industries (SSI) Exemption if excise duty was applicable to the winding wires.

On the other hand, the Respondents contended that they started the manufacturing process with wire rods of 8 mm diameter, which had already incurred excise duty. They emphasized the technical necessity of reducing the wire gauge during the manufacturing process. Referring to relevant specifications and judicial precedents, they argued that any intermediate products during manufacturing should not affect the exemption eligibility. They also pointed out that wire drawing was an essential step in the process and cited previous cases to support their position.

Another advocate representing one of the Respondents echoed similar arguments and referenced a Supreme Court decision to strengthen their case. They emphasized that the entire quantity of raw material should be considered for exemption, even if some non-specified articles emerged during the manufacturing process.

In delivering the judgment, the Tribunal considered the arguments presented by both sides. They noted that the notification exempted winding wires made from specific products exceeding 6 mm in dimension on which duty had been paid. The Tribunal agreed with the Respondents that the raw material at the start of the manufacturing process should determine exemption eligibility. They emphasized that the wires used by the Respondents were initially over 6 mm in dimension, meeting the notification's criteria. The Tribunal distinguished a previous case involving regulators and apparatus, stating that the present case involved a different scenario. As all conditions of the notification were met by the Respondents, the Tribunal upheld the Commissioner's orders, granting them the benefit of the notification.

Ultimately, the Tribunal rejected the Revenue's appeals, rendering the issue of SSI Exemption irrelevant due to the exemption granted under Notfn. No. 69/86. The Tribunal also disposed of all cross objections filed by the Respondents in light of their decision.