2000 (12) TMI 334 - AT - Central Excise

Summary

Issues:
1. Classification of slitting and shearing of flat rolled sheets in coil form under Central Excise Act.
2. Determination of whether slitting and shearing activities amount to manufacture.
3. Assessment of excisability and levy of Central Excise duty based on the resultant product classification.

Issue 1: Classification of Slitting and Shearing:
The judgment involved three appeals, one by the Revenue and two by the assessees, challenging the Order-in-Appeal modifying the original classification regarding the excisability of sheets made by slitting and shearing from flat rolled sheets in coil form. The Collector (Appeals) had remanded the matter to the Assistant Commissioner for a fresh order based on the classification lists.

Issue 2: Determination of Manufacture:
The assessees, engaged in slitting and shearing, argued that their activities did not constitute manufacture under the Central Excise Act. The Assistant Commissioner had initially classified the activities as manufacture, rejecting the assessees' classification. The Collector (Appeals) held that if the input material and resultant product remained in the same tariff sub-heading, it did not amount to manufacture. The Revenue appealed this decision, contending that even without altering the width or length of the sheets, the activities amounted to manufacture.

Issue 3: Excisability and Levy of Duty:
The judgment addressed whether slitting and shearing activities resulted in the creation of new marketable products attracting Central Excise duty. The Revenue argued that any new marketable product constituted manufacture, citing legal precedents. However, the assessees maintained that no distinct or new product emerged from the activities, hence not subject to excise duty. The judgment referenced various legal interpretations of the term "manufacture" by the Apex Court to determine the applicability of duty based on the resultant products' classification under the tariff sub-headings.

The judgment analyzed the definitions of "manufacture" provided by legal precedents to determine whether the activities of slitting and shearing constituted manufacturing under the Central Excise Act. It was highlighted that if the resultant products did not form new distinct commodities and remained under the same tariff sub-headings as the inputs, they did not amount to manufacture. The judgment dismissed all three appeals but directed the Assistant Commissioner to provide a hearing to the assessees before passing a fresh order on their classification lists, considering the facts and circumstances of the case.