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TMI Blog2002 (12) TMI 482X X X X Extracts X X X X X X X X Extracts X X X X ..... removed bearing boxes likewise during those periods. The department, by show-cause notice dated 12-4-91 answerable to the Additional Collector of Central Excise, proposed to levy duty of excise on the structural items and bearing boxes, alleging that the structural items and bearing boxes were chargeable to duty of excise under Chapter 73 and Chapter 84 respectively of the CET Schedule. It raised a demand of duty of Rs. 1,92,982.64 on the appellants, invoking the extended period of limitation under the proviso to Section 11A (1) of the Central Excise Act for which it was alleged that the appellants had suppressed production and removal of excisable goods with intent to evade payment of duty. Later on, by a corrigendum, the show-cause notice was made answerable to the Collector of Central Excise. In their letters dated 17-10-91 and 25-5-93, the appellants denied the department s allegations and took the stand that the subject items were not chargeable to duty. They also raised alternative grounds for challenging the demand of duty. These included the plea of limitation. They also objected to the value addition made by the Collector. In adjudication of the dispute, the Collector con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng 8483.00 were not manufactured by them. Those items were received by them under cover of gate passes issued by Rourkela Steel Plant, for machining on job work basis. The appellants contended that they were not liable to pay duty on the bearing boxes on which they had undertaken job work only in terms of Rule 57F (2). They were also not liable to pay duty on the bolts and nuts purchased from the market. They raised the same plea in regard to foundation bolts and nuts also. Referring to the challans (which were submitted to the department by the appellants themselves) on the basis of which the demand of duty was made, the appellants submitted that most of those challans related to materials which had been returned as defective from the sites and subsequently sent back after removal of defects. The remaining challans related to materials which were despatched to the site to make up short supply. Since the duty of excise on entire quantity of materials covered under gate passes had been paid at the time of original despatch in terms of the contract, no further levy of duty could be made on the goods supplied later only to make up the short supply. The members of the tower were not ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s), Counsel submitted that what the appellants had done on that item was only machining on job work basis. Machining did not amount to manufacture and, therefore, the machined boxes were not excisable. Referring further to case law, the counsel submitted that the department s appeal against the Tribunal s decision in the Dodsal case (supra) was referred by a Division Bench of the Supreme Court to a Larger Bench and the Larger Bench dismissed the department s appeal [2001 (132) E.L.T. A89]. Ld. Counsel, therefore, contended that the non-excisability of the duty-paid angles, shapes, sections, etc., cut to shape and size and used in the construction of transmission towers was finally settled by the Supreme Court in favour of the assessee. With regard to the bolts and nuts, which were claimed to have been purchased from the market and supplied to the customer site, the counsel reiterated the appellant s submissions made in their reply to the show-cause notice. Ld. Counsel also raised a plea of violation of principles of natural justice in relation to the value addition made by the Collector. He submitted that the Collector enhanced the assessable value by 25% on the basis of some repo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Dodsal (supra). On a perusal of the Tribunal s decision in Dodsal case, we note that it has been held in that case that the processes of galvanizing and drilling of steel beams/joists do not amount to manufacture under Section 2(f) of the Central Excise Act. In that case, the coordinate Bench of this Tribunal was relying on an earlier decision in the same assessee s case [CCE, Baroda v. Dodsal Pvt. Ltd. - 1987 (28) E.L.T. 352]. In the said earlier case, it had been held that there was no manufacture of excisable goods in the activity of cutting into pieces, bending, punching and galvanizing of iron and steel angles, plates, channels and rods (supplied by the Orissa State Electricity Board), for the purpose of erection of transmission tower for the Electricity Board. In the second Dodsal case [1993 (67) E.L.T. 138], the Tribunal followed the ratio of the decision in the first Dodsal case, and held that structural parts for fabrication of transmission line tower were not excisable. The department s appeal against the decision in the second Dodsal case was dismissed by a Larger Bench of the Supreme Court [2001 (132) E.L.T. A89]. It has been argued by ld. DR that the Central Excise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9. Insofar as the bearing boxes mentioned at Sl. No. 5 are concerned, it has been strenuously argued on behalf of the appellants that those items were received from Rourkela Steel Plant for machining on job work basis, under cover of gate passes issued by the Steel Plant. The appellants have claimed that they were acting under Rule 57F(2) of the Central Excise Rules 1944 as the rule then stood. Apparently, they failed to produce evidence before the adjudicating authority to show that they had received the goods under Rule 57F(2) and removed them back to the Rourkela Steel Plant after job work without having to pay duty thereon. 10. The Collector has made a value addition of 25% in respect of the goods on the strength of the price variance clause in the contract between the appellants and the Orissa State Electricity Board. This addition was apparently made by the Collector on the basis of a report submitted by the Supdt. (Adjudication) of Sambhalpur Division. But the report of the Supdt. was not disclosed to the party. Therefore, the value addition made by the Collector is violative of the principles of natural justice. This apart, no price variance bill was shown to have been ra ..... X X X X Extracts X X X X X X X X Extracts X X X X
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