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TMI Blog1986 (1) TMI 259X X X X Extracts X X X X X X X X Extracts X X X X ..... rged that they were doing job work of straightening, cutting into required lengths, bending, punching and galvanising steel angles, plates, channels, round bars etc. falling under T.I. 26AA. (The raw materials were purchased by the Gujarat Electricity Board and supplied to the respondents.). The appellants urged that they were not carrying out any manufacturing process as contemplated under Section 2(f). A fresh classification list was filed by them indicating the following items : By the processes which we do on products of iron and steel (TI 26AA), no new products come into existence, attracting duty of excise under T.I. 68. (1) Iron/steel angles plates, channels and round bars supplied by the Gujarat Electricity Board are cut into pieces, given bend and punched according to order of G.E.B., galvanised by dipping in molten zinc and returned to the supplier. The processed products remain covered under T.I. 26AA as no new products come into existence. (2) Products of iron and steel supplied by the customers are returned to them in the same physical condition after galvanising by dipping them in molten zinc. (3) Iron/steel products galvanised supplied by the customers retur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... designed and processed, and were taken to the site where a transmission tower was erected. The cutting, punching, bending, twisting and galvanising are activities performed, according to the contract and requirements of the Electricity Board. The scrap that arises during the course of the manufacture is either sold or returned to the Electricity Board. The definition of manufacture under Section 2(f) is an inclusive definition and it would take within its ambit incidental and ancillary process. Shri Jain urged that the use of the products would not be the criterion under T.I. 26AA. The items were cleared from the factory and did not require any further process at a subsequent stage. A complete transmission tower or its components were being removed from the factory. The object of the clearance is to bring into being a transmission tower. The component parts are sent in a knocked down form for the purpose of convenience. What is carried to the site is the transmission tower and the erection is done at the site. 7. Shri Jain urged that the angles ceased to be mere angles after the process and they would be sold as part of the transmission tower. They are no longer called angles and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e original identity of the angles and rounds continued to be the same. The gate passes referred to the clearances as structures of steel material . The dimensions of the angles have been mentioned in the dispatch challan. The IS: 808 part 2 contained the parts of structural steel in overhead transmission line tower. The entire activity is a fabrication activity and the fabrication of the transmission tower is done according to the specifications set out in IS: 800-1962. The angles, sections, rounds, etc. are not recognisable as parts of a transmission tower. They are not goods which are brought and sold nor these items are known in the trade circles as component parts of a transmission tower. The learned Counsel placed reliance on the following rulings : (i) 1978 (2) E.L.T. J-336, South Bihar Sugar Mills Ltd., where it was held that the kiln gas was not carbon dioxide. The word manufacture implied a change and there must be such a transformation that a new and different article must be emerged, having a distinctive name, character or use; (ii) In 1986 (8) ECT 166, Aruna Industries, on identical facts the Tribunal held that structural beams, channels, bulbs, angles etc. are dif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... manufacture transmission towers by the DGS D and it was their intention to manufacture such towers. They have never disclosed to the Department about the licence. The totality of the parts manufactured and the assembling thereof as transmission tower would indicate that these items would attract duty. The S.D.R. submitted that the marketability was of no consideration for liability to excise duty [1986 (9) ECC 198 (Bom.) followed in 1986 (10) ECC 248]. He argued that the Appellate Tribunal was entitled to re-examine the evidence and arrive at its own findings on the facts. He also referred to 1984 (4) ETR 139 (Rajasthan Spinning weaving Mills) regarding the powers of the Tribunal in the matters of classification. 12. The point for determination in the appeal-is : (i) Whether the iron steel angles, plates, channels and rods supplied by the Gujarat Electricity Board which were cut into pieces, bent and punched according to the orders and galvanised and returned to the suppliers and the erection of the transmission tower would be liable to Central Excise Duty under Item 68 of the Central Excise Tariff? 13. It is well settled that before duty is attracted under Section 3 of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing, punching and galvanising steel angles, plates, channels and bars which are duly paid, they would become different articles attracting excisable duty. The raw materials would continue to be in the same condition except that certain operations have been carried on them according to specifications. The materials do not undergo any transformation or total change that they would hop into Item 68. There is no evidence that such pieces, small or big, are being sold in the market as component parts of a transmission tower. Transmission tower is a metal or timber structure used to carry a transmission line. It is an engineering device for the purpose of holding electricity transmission lines. We have come across component parts of a machinery, component parts of a vehicle, and such other goods. But one cannot say that there could be component parts of a transmission tower. For other essential parts would differ in size and dimensions depending on the location where tower has to be erected. The term structural shape means the joining of individual members of a structure to form a complete assembly. The angles, beams, round etc. are merely structural shapes which when joined according ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facto follow that the processes carried on by the respondents would amount to manufacture under the Act. If the totality of the circumstances are taken into account it would be clear that the respondents have been assigned the works contract of erecting a transmission tower and not manufacture component parts of a transmission tower. 18. The Assistant Collector has held that these products would attract duty under Item 68. He has observed that the materials have been cleared with the description raw material for transmission towers . But we do not understand how on that ground duty would be attracted. The respondents have also filed the Xerox copies of the gate passes and also the dispatch challans which would reveal that they were clearing only angles, plates, bars, etc. The next ground set out in the order-in-original that the invoices did not indicate the material as materials for transmission towers. There is a fallacy in this argument because the Gujarat Electricity Board merely sent these angles, rounds, etc. The respondents carried on certain processes like bending and punching holes etc. At no time did these items became raw-materials for transmission towers. Hence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s arguments. He maintained that the cutting to required lengths, bending, punching, etc. of the angles, plates, channels and other sections were processes incidental or ancillary to the completion of a manufactured product. The manufactured product obviously cannot be the tower because the cutting, drilling, bending etc. were, according to the Central Excise themselves, processes of making parts for building the tower, and hence, there is nothing incidental or ancillary about these processes. They are direct and proximate. They operate as cause-to-effect in the construction of the tower. The tower appears after the bending, cutting and receives its form and existence from the processes. 24. The only products the processes can be incidental or ancillary to are the angles, channels, sections etc. If the bending, cutting are incidental or ancillary to their completion, the Central Excise should have waited for such incidental processes to complete the manufactured product, angles, channels, before charging duty. But we know that the angles etc. were all duty paid when they appeared on this scene. Do the Central Excise propose charging duty on the angles etc., after the incidental ..... X X X X Extracts X X X X X X X X Extracts X X X X
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