9911796707
TMI Blog2002 (12) TMI 351X X X X Extracts X X X X X X X X Extracts X X X X ..... are engaged in the fabrication of certain parts out of the materials received from Railway Coach Factory (RCF); that the activities undertaken by them are basically in the nature of punching and bending; that at the time of supply of fabricated items, they paid excise duty on the process/jobwork charges though the activity undertaken by them did not amount to manufacture; that on account of bona fide belief they did not include the value of the materials supplied by RCF in the assessable value and availed of the benefit of SSI exemption Notification; that the Commissioner, under the impugned Order, has confirmed the demand of duty and imposed equivalent amount of penalty holding that after the process of punching, welding and bending under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e also mentioned that in respect of Outer Door Assembly, the Appellants receive door on which they fix angles, rods and bolts only and return the door to RCF who does the drilling operations, threading operations to fit the window frame. He contended that the activity undertaken by them does not bring into existence a new commercial product with distinct name, character and use; that even after the fabrication activity undertaken by them, the items are only in semi-finished nature and further finishing operations are undertaken by RCF; that consequently Note 6 to Section XVII of the Schedule to the Central Excise Tariff Act is not applicable since the said Note can be invoked only in a situation where the operation are in the nature of fini ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ners v. Commissioner of Central Excise Jaipur, 1998 (29) RLT 423 (CEGAT). 4. Countering the arguments, Shri S.M. Tata, learned Senior Departmental Representative, submitted that from the processes undertaken by the Appellants it is apparent that the processes of edge bending and punching have given the steel sheets a definite shape, character and use which otherwise would have been just steel sheet pieces; that on account of use of additional raw materials such as angles and rods, Outer door assembly have attained the definite shape, character and use as an outer door assembly; that accordingly Note 6 to Section XVII of the Tariff is attracted and the processes shall amount to manufacture. He also submitted that extended period of lim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... idered the submissions of both the sides. The Apex Court in the case of Union of India v. J.G. Glass Industries Ltd. - 1998 (97) E.L.T. 5 (S.C.) = 1997 (23) RLT 768 (S.C.), after analysing the various judgments on the aspect of 'manufacture' has laid down a two-fold test for deciding whether the process is that of "manufacture". The two-fold test is as under : "First whether by the said process a different commercial commodity comes into existence or whether the identity of the original commodity ceases to exist; secondly, whether the commodity which was already in existence will serve no purpose but for the said process. In other words, whether the commodity already in existence will be of no commercial use but for the said process." 6.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter Door Assembly neither the tests laid down in J.G. Glass case are satisfied nor the requirement of Note 6 to Section XVII of conversion of an article which is incomplete or unfinished into complete or finished article is fulfilled. 7. Coming to the question of invokability of extended period of limitation for demanding duty, we observe that the Appellants have not disputed the fact that they had not disclosed to the Department, that the duty liability is discharged by them without including the cost of materials received by them free from M/s. RCF. It is also not the case of the Appellants that copies of Purchase Orders were submitted to Revenue along with the invoice. It is well settled law that the excise duty is payable on the e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e that the Department was aware of the supply of material free of cost by RCF which is apparent from the show cause notice dated 30-4-96 issued to the Appellants for disallowing the benefit of Notification No. 175/86-C.E. Accordingly, following the ratio of the decision of the Larger Bench of the Tribunal in the case of Nizam Sugar Factory v. Commissioner of Central Excise, Madras, 1999 (114) E.L.T. 429, we hold that extended period of limitation is not available to Revenue for demanding duty from 30-4-96. The extended period is, however, invocable for the period prior to 30-4-96. 8. The matter has to go back to the Jurisdictional Adjudicating Authority to recompute the duty amount payable, if any, by the Appellants on account of our ..... X X X X Extracts X X X X X X X X Extracts X X X X
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