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TMI Blog2004 (1) TMI 401X X X X Extracts X X X X X X X X Extracts X X X X ..... pressure cookers, kitchen utensils, aluminium circles, aluminium strips, etc.; that a show cause notice dated 16-4-99 was issued to the Appellants alleging that they were maintaining various sets of invoices, viz., A C , I , and J Series invoices whereunder Pressure Cookers, brass coils/strips, CRSS coils/strips/sheets and products after cutting/slitting/breaking into small sizes were cleared respectively on payment of duty; M-Series invoices for (a) clearing CRSS Products after hardening and reducing thickness without payment of duty, (b) selling brass coils/strips manufactured out of scrap on labour basis, (c) clearing bought out aluminium coils after reducing of thickness and annealing and (d) clearing brass scrap, copper scrap, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eaning of Section 2(f) of the Central Excise Act, 1944. ; that this fact was also noted by the Collector (Appeals) in Order-in-Appeal No. 178/86, dated 1-7-86. 4. On merit, the learned Senior Counsel mentioned that the Appellants merely reduce the size of the cold rolled products; that the cold rolled products received by them for reduction in size, already possess the requisite degree of hardness and temper; that during such reduction, some incidental increase in hardness might have taken place which cannot mean that they are undertaking the process of hardening as contemplated by Note 4 to Chapter 72 of the Schedule to the Central Excise Tariff Act; that they have not installed in their factory the requisite machinery for undertaking th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oned that letters, dated 23-4-96 and 29-1-97, referred to in the show cause notice, do not talk of any different hardness; that the complaints therein were with reference to the make of the product. 5. He also submitted that the different sets of invoices had been maintained by the Appellants after obtaining proper permission from the Department under letter, dated 8-6-94. Regarding scrap, he mentioned that all manufactured scrap was cleared on payment of duty; that where the scrap was bought from outside and traded as such without bringing into the licensed premises no duty was paid, except where the buyer wanted Modvatable invoices. The learned Senior Counsel emphasised that the Adjudicating Authority has reproduced the show cause notic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cleared under M series invoices without payment of duty; that the scrap generated during the manufacturing activity is dutiable; that their plea that they were engaged in trading activity of brass scrap is not acceptable since they had also sold aluminium scrap and CRSS scrap which they had never purchased; that moreover they had not informed the Department about their trading activity. He finally submitted that extended period of limitation is invocable under Section 11A(1) of the Central Excise Act for demanding duty as they had nowhere declared that they were reducing the thickness and undertaking the process of hardening by way of cold rolling and annealing in furnace. 6.1 In reply the learned Senior Advocate referred to the Certif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pose only. 7. We have contended the submissions of both the sides. Note 4 to Chapter 72 of the Central Excise Tariff mentions that in relation to flat-rolled products of this Chapter, the process of hardening or tempering shall amount to manufacture . It is the case of the Revenue that the Appellants were doing processes of hardening of CRSS Products by cold rolling and annealing whereas the Appellants have contended they do not have the requisite plant/machinery for hardening and they were engaged only in the process of size reduction which may increase the hardness marginally but it would not amount to a process of hardening as contemplated by Note 4 to Chapter 72. The Applicants have relied upon the Certificate given by Shri R.S. Khur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... apter No. 72, the process of hardening and tempering shall amount to manufacture. Thus, the party are required to pay Central Excise duty on such hardened products. 8. We also observe that the learned Adjudicating Authority has not considered the technical literatures and certificates produced by the Appellants. The issue involved is a technical one as to whether the process of reducing the size by cold roll process can be equated with the process of hardening or tempering mentioned in Note 4 to Chapter 72 of the Central Excise Tariff. The Adjudicating Authority should have considered the technical material furnished by the Appellants and, if required, should have obtained the technical opinion from experts in the field. As this exercis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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