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TMI Blog1989 (12) TMI 186X X X X Extracts X X X X X X X X Extracts X X X X ..... tric furnace at a pre-determined temperature. These are tested and supplied to the railway department for use as elastic rail clips. The appellants claim the entire process as a forging process, falling under Item 25(11) of the erstwhile Central Excise Tariff and claim exemption under Notification 208/83, dated 1-8-1983. The Collector of Central Excise has not accepted the classification under T.1.25(11) and has reasoned as follows: The Party s argument is based on their claim that these rail clips are manufactured by forging. The party themselves have given the details of the process of manufacture. The manufacture of rail clips start with iron/steel rods. These are first cut into specific required sizes of particular length. The cutpieces are then heated in a furnace to high temperature. The red hot iron rods are then bent on bending machines to give the required specific shape. The red hot pieces are forged in power press in the dies fitted in the press and are directly dipped in oil for quenching. Then the pieces are taken out of the oil and are tempered in an electrically heated tempering furnace to give strength. It is obvious from the foregoing that forging forms only one ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded and confirmed with a penalty of Rs.30,000/- Against this order the appellants have appealed to the Tribunal. 2. The appellants claim classification under T.1. No. 26AA(la) as it was prior to 1-8-1983 treating them as forged shapes and sections and under T.I. 25(11) after 1-8-1983. They claim exemption under Notification 206/63-CE, dated 30-10-1983 which remained in force till 31-7-1983 which exempts goods falling under Item No. 26AA (la) when made from another duty paid product covered under the same tariff. Thereafter under Notification No. 208/83, dated 01 August 1983, which exempted goods under T.1. 25(11) when produced out of bars and rods covered under Item No. 25(9). Since the Govt. of India had also exempted such units from licensing control under Notification No. 111/78, dated 09-5-1978, no licence was obtained. 3. Shri P.S. Bedi, learned advocate in his submissions which reiterating the points raised in the appeal memorandum submitted that the process involved was only forging. The hardening and tampering does not alter the product. The appellants had written a letter dated 1-12-1980 to the Assistant Collector of the division about the product manufactured and ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing a distinctive name, character and use. 5. 1978 E.L.T. 336 South Bihar Mills Ltd. and Others v. Union of India - Manufacture - Meaning of - The word manufacture implies a change but every change in the raw material is not a manufacture. There must be such a transformation that a new and different article must emerge having a distinctive name, character or use (see Para 14). 6. AIR 1973 (S.C.) 425 - Allenberg Engineering Pvt. Ltd. v. Shri Ram Krishna Dalmia - The expression manufacturing process thus means processes making or fabricating articles or materials by a physical labour or skill or by mechanical power vendible and useful as such. Such making or fabricating does not mean merely a change in an already existing article or material, but transforming it into a different article or material having a distinctive name, character, or use or fabricating a previous article by a noval process", 7, 1983 (13) E.L.T. 1582 (S.C.)= 1976-37 STC 319-S.C. State of Tamil Nadu v. Pyarelal Malhotra - If the question is whether a new commercial commodity has come into existence or not, it is necessary to consider whether a manufacturing process has altered identity of the commercia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Manufacture. 5. 1988 (38) E.L.T. 535 (S.C.) Ujagar Prints, etc. etc. v. Union of India and others - Manufacture - Scope of - Manufacture vis-a-vis processing - Section 2(f) of the Central Excises and Salt Act, 1944. - The prevalent and generally accepted test to ascertain that there is manufacture is whether the change or the series of changes brought about by the application of processes take the commodity to the point where commercially it can no longer be regarded as the original commodity but is, instead recognised as a distinct and new article that has emerged because of the result of the processes. There might be border-line cases where either conclusion with equal justification be reached. Insistence on any sharp or intrinsic distinction between processing and manufacture , results in an over simplification of both and tends to blur their interdependence in cases. By the above citations, Shri K.D. Tayal emphasized the point that the process of manufacture undertaken by the appellant was no longer a mere forging, but a new product with an identifiable shape was brought into being. The Notification 111/78 can be availed only after a declaration is filed. 6. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was no suppression or concealment. The learned advocate has during his submissions referred to a letter dated 1-12-1980 written by him as an Authorised representative of M/s. Paxma Axle and Springs (P) Ltd. stating that they are manufacturing goods falling under Item 68 and they were forging duty paid Iron and Steel Rods into shapes as per drawing given by the Railway Department. He had enclosed a sample and asked the department to confirm the views that the product falls under Item 26AA(la) of the Central Excise Tariff and not under Item 68, and will not attract further duty that no licence will be required as contemplated under Notification No. 31/76, dated 28 February 1976. The letter has been addressed to the Assistant Collector MOD III. The learned SDR has confirmed that it was received in the Department as per receipt endorsement. The learned advocate also contended that this matter was also intimated to the Collector in their reply to the Show Cause Notice but the Collector had not taken into consideration this letter. It was seen that the letter has been mentioned in their reply dated 3-7-1986. Therefore the learned advocate contended that there was no concealment or suppre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 980 should be taken as an intimation to the Department. When no reply in confirmation was received and the Department in having asked the appellant during 1983, for furnishing the information has been oblivious of the activities of the appellant. It was a responsibility cast on the appellant as a manufacture under the self removal procedure to see to it that they follow the provisions of the Central Excise Act and Rules and pay duty if required and maintain accounts. They should have pursued the matter with the Department and obtained their confirmation for classifying their product and submitted a declaration for exemption from licensing control. A mere letter addressing the Department will not absolve them of their responsibilities. Hence they cannot take shelter under the plea that they had intimated the Department and no suppression was envisaged. It is further seen from the letter of the Department that they had as early as 17-4-1982 made a reference to the appellant and that they were not submitting the RT.12 returns and observing the formalities under the Central Excise Rules. Therefore the Superintendent of Central Excise has directed them to produce the information called, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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