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TMI Blog1994 (11) TMI 251X X X X Extracts X X X X X X X X Extracts X X X X ..... ) Ltd. had also manufactured GSS Wire on their own account. It was alleged that GSS Wire was classifiable under Item No. 68 of the Tariff. It was found that the appellants had not applied for Central Excise Licence and did not account for their production in the statutory records. The value of their clearances had exceeded the exemption limit but no Central Excise Duty leviable on the excisable and dutiable goods was paid, and the said goods were removed in violation of the provisions of the Central Excise Rules, 1944 (hereinafter referred to as the `Rules ). The Collector of Central Excise, Kanpur who adjudicated the matter imposed a penalty of Rs. 2.00 lakhs on GIC, and demanded Central Excise duty amounting to Rs. 2,19,776.40. He also appropriated the security of the Bond amounting to Rs. 1,10,000/- towards payment of redemption fine in respect of the seized goods. Except for the orders made with regard to the seized goods, the proceedings against Arkay were otherwise dropped. 3. Both the cases were posted for hearing on 26-9-1994 when Sh. A.N. Sharma, Consultant appeared for the appellants. Sh. K.K. Jha, SDR represented the Respondents. 4. Sh. A.N. Sharma, the ld. Consultan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red to the Tribunal s decisions in support of his contention that no process of manufacture was involved in the production of GSS Wire out of GI Wire. 7. We have carefully gone through the facts and circumstances of the case and have given our due thought and consideration to the submissions made by both the sides. 8. The Adjudicating Authority, the Collector of Central Excise, Kanpur had framed the following issues for his consideration and decision :- (i) Whether manufacture of GSS Wire out of GI Wire will amount to manufacture as defined under Section 2(f) of CESA, 1944. (ii) Whether GSS Wire would be classifiable under Item No. 68 of the Central Excise Tariff or it would fall under Item No. 26AA of the Tariff. (iii) Whether both the parties - GIC and Arkay - are under common proprietary interest and whether value of the goods cleared by both the parties should be clubbed for computing the exemption limit under Notification Nos. 176/77 and No. 89/79. (iv) Whether the total capital investment on Plant and Machinery installed in the Industrial units of the parties where goods falling under Item No. 68 of the Tariff were manufactured, exceeded the value of Rs. 10 lakhs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods but also any person who engages in their production or manufacture on his own account." The High Court of Delhi in the case of Metal Forgings (P) Ltd. v. U.O.I. and Others - 1987 (32) E.L.T. 15 (Del.) had dealt with the provisions relating to manufacture under the Central Excise Law, and in paras 15, 16 and 17 of their judgment they have held as under :- ******* 11.Item No. 26AA of the Tariff reads as under :- Item No. Tariff Description 26AA. Iron or steel products, the following, namely :- Semi-finished steel including blooms, billets, slabs, (i) sheet bars, tin bars and hoe bars. Bars, rods, coils, wires, joists, girders, angles other than slotted angles, channels other than slotted channels, tees, beams, zeds, trough piling and all other rolled, forged or extruded shapes and sections, not otherwise specified. Plates and sheets (including uncoated plates and sheets intended for tinning and forms such as ridges, channels other than slotted channels, rainwater pipes and their fittings, made from plates or sheets, but not including plates and sheets after tinning), and hoops, all sorts, other than ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and (refer the Publication, The Making Shaping and Treating of Steel. U.S. Steel Page 867). In the case before us, the GSS Wire was manufactured out of GI Wires by stranding 7 or 8 single galvanised wires together on power driven stranding machine. In para 18 of his order, the Collector of Central Excise, Kanpur has held as under :- In the instant case GSS Wire was manufactured out of GI Wire by stranding 7 or 8 single galvanised wires together on power driven stranding machine. There is no denying the fact that GSS Wire is a different commodity having suffered a distinct change in its physical appearance than the GI Wire though chemical property of both might be the same i.e. Iron/Steel Wire. It is not only different in physical shape but also its use is also different. In common trade parlance also both the commodities are recognised as two distinct commercial commodities. GI Wire is used for making rails wire - ropes etc. while GSS Wire is used for stay purposes and for giving strength. Thus, GSS Wire is a new and different article with distinct name, character and use and satisfies the principles enunciated by the Hon ble Supreme Court of India in the cases cited above. I, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubbed together in the relevant tariff entry, and the Supreme Court held that it was the clubbing of the Iron Rod and Wire in the concerned entry which made material difference, and clinched the issue. The Hon ble Supreme Court in the case of Laminated Packings (P) Ltd., v. CCE - 1990 (49) E.L.T. 326 (SC) had held in para 4 of their judgment that Laminated Kraft paper was distinct, separate and different goods known in the market as such from the Kraft paper. They observed that the fact that the duty has been paid on the kraft paper is irrelevant for consideration of the issue before us. If duty has been paid then benefit or credit for the duty paid would be available to the appellant under Rule 56A of the Central Excise Rules, 1944. On the question of manufacture, the Hon ble Supreme Court held in para 6 as under :- The further contention urged on behalf of the appellant that the goods belong to the same entry is also not relevant because even if the goods belong to the same entry, the goods are different identifiable goods, known as such in the market. If that is so, the manufacture occurs and if manufacture takes place, it is dutiable. `Manufacture is bringing into being go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. v. Union of India Ors. (1985 Suppl SCR 292 = 1985 (20) E.L.T. 179 (SC) ). 17. In the light of the above discussion, there is no doubt that the process by which the GSS Wire is manufactured from the GI Wires is a process of manufacture, and the manufacture of GSS Wire out of GI Wire amounts to manufacture as per Section 2(f) of the Act. 18. In the case of Asstt. Collector of Central Excise, Anantapur v. Ranka Cables (P) Ltd., Cuddapah, Tribunal Order No. 156-160/86-B1 in appeal No. 2451 3091 to 3094/84-B1, the matter related whether the bare Aluminium Wires thicker than 10 SWG could be classified as Electric Wires under Item No. 33-B(ii). In the case of CCE v. Andhra Industrial Works - 1991 (56) E.L.T 838 (T), the matter related to the conversion of Aluminium Wires into Aluminium Conductors. In the other two cases relied upon by the appellants - (1) Aluminium Industries Ltd., Kerala v. CCE, Cochin - 1987(30) E.L.T 442 (T) and (2) Indian Aluminium Cables Ltd., Ghaziabad v. CCE, Meerut - 1987 (32) E.L.T. 789 (T), it is seen that there is no discussion about the process of manufacture, transformation of the GI Wires into GSS Wire, the usage of the finished product vis-a-vis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l of capital investment on Plant and Machinery of the Industrial Unit of Arkay did not exceed Rs. 10 lakhs, and that the value of the goods cleared by them during the financial year 1978-79 did not exceed Rs. 30.00 lakhs. Accordingly, he allowed exemption in respect of the goods valued Rs. 7,34,297.10 cleared by Arkay during the financial year 1979-80 in terms of Notification No. 89/79-C.E., dated 1-3-1979. With regard to GIC, relief has been given in respect of Sales Tax and surcharge amounting to Rs. 86,655.58 which had been included in the value of the Barbed Wire. He accepted the contention of the party in this regard and held that the amount of sales tax and surcharge included in the value was required to be excluded. He also accepted the contention of the GIC that the value should be calculated at the rates prevailing at the time of clearance, and not at the rates prevailing at the time of the seizure, which were higher than the rates prevailing at the time of actual clearance. He allowed exemption to the first clearances of the goods falling under Tariff Item No. 68 upto the value of Rs. 30.00 lakhs during the year 1978-79. Further, he held in para 42 that the party for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lace reliance on different decisions of the CEGAT in chain of decisions viz. Rekha Industries Bombay v. Central Board of Excise and Customs, 1983 ECR 938, Goodwin Rubber Works v. Collector of Central Excise, Cochin 1983 ECR 504D, Ceakay Rubber Industries v. Collector of Central Excise, Madras 1983 ECR 687D and also Rishi Enterprises, Bombay, 1984 ECR 762 wherein it has been categorically held that demand under Rule 9(2) was enforceable in all cases where there had been manufacture and removal of goods without intimation to the Central Excise authorities and without obtaining Central Excise Licence and without payment of duty besides maintaining statutory records. It was also held in the case of Rishi Enterprises, Bombay v. Collector of Central Excise (supra) that in all such cases extended period of limitation of 5 years would apply. In the instant case, as discussed at paras 49 50 above, the- party No. 2 did not obtain a Central Excise licence, did not maintain Statutory records and cleared the said goods without intimation to the Central Excise authorities and without payment of duty. I, therefore, do not find any force in the argument of the party and am of the considered view ..... X X X X Extracts X X X X X X X X Extracts X X X X
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