2015 (12) TMI 1101 - AT - Central Excise

Duty demand - Manufacture - whether Aluminium wire Rods /Aluminium wires (30 in number) when twisted with a core of steel wires (7 in number) amounts to manufacture of a different manufactured product - Held that - Plaited wire bands and the like of Aluminium with a steel core fall under CETA 76.04 and have a different name, character and use. The certificate given by a Chief Engineer of Govt. of Mizoram cannot be considered as an authority that there is no change in the raw material and the finished product, when there is a change in the classification of the finished goods to 76.14. Criteria laid down by Hon ble Apex Court in the case of U.O.I. Vs. Delhi Cloth & Mills Co. Ltd. 1962 (10) TMI 1 - SUPREME COURT OF INDIA , regarding change in the name, character and use of the resultant product are fulfilled - activities undertaken by the appellants amount to manufacture of finished goods falling under CETA 76.14. Extended period of limitation - appellants never filed any declaration with the Department indicating the processes undertaken by them. When no intimation of the activities is filed with the department, it cannot have any knowledge of the activities being undertaken. Under the circumstances we agree with the view of the Adjudicating authority that extended period of five years is invokable in these proceedings - Matter remanded back - Decided in favour of assessee by way of remand only .

Summary

Issues:
Manufacture of conductors from Aluminium wire rods and steel wires; Non-supply of documents to the appellants; Invocation of extended period for demand; Calculation of duty liability and benefits; Remand for re-quantification of duties and penalties.

Manufacture of Conductors:
The appeal involved determining whether twisting Aluminium wire rods with steel wires constitutes the manufacture of a different product. The appellants argued that the process did not amount to manufacture as certified by the Chief Engineer, Govt. of Mizoram. However, the Revenue contended that the process did amount to manufacture based on the change in classification from CETA 76.04 to 76.14. The Tribunal cited relevant case laws and the HSN explanation notes to support its conclusion that the activities undertaken by the appellants qualified as manufacturing under CETA 76.14.

Non-Supply of Documents:
Regarding the non-supply of documents to the appellants, it was found that all necessary documents had been received by the appellants as per the CESTAT's order. Therefore, the argument regarding non-supply of documents was deemed invalid.

Invocation of Extended Period:
The Tribunal agreed with the Adjudicating authority that the extended period of five years was applicable since the appellants had not filed any declaration with the Department indicating the processes undertaken by them. The lack of intimation to the department prevented them from having knowledge of the activities, justifying the invocation of the extended period.

Calculation of Duty Liability and Benefits:
The appellants raised concerns about the calculation of duty liability, SSI benefit, and other deductions not being allowed by the Adjudicating authority. The Tribunal acknowledged these issues and remanded the matter to the Adjudicating authority for a detailed examination and re-quantification of duties and penalties after providing the appellants with an opportunity for a personal hearing.

Remand for Re-Quantification:
Ultimately, the appeals filed by the appellants were allowed only for the purpose of re-quantifying duties and penalties. The Tribunal directed the Adjudicating authority to address the unresolved issues and make necessary adjustments in duty calculations and penalties based on a detailed examination of the case records.

This comprehensive analysis of the judgment highlights the key issues addressed by the Appellate Tribunal CESTAT KOLKATA in the cited case, encompassing the arguments presented by both parties and the Tribunal's findings on each issue.