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TMI Blog2006 (9) TMI 420X X X X Extracts X X X X X X X X Extracts X X X X ..... appeals, Appeal No. E/1488/2000 in detail. The facts of the case are that M/s. Vijay Transformers, Chennai were engaged in the repair of sick transformers and manufacture of new transformers. In 1985, the assessee had obtained L-4 licence under Rule 174 of Central Excise Rules, 1944 for manufacture of Distribution transformers and Transformer coil windings. In the year 1992, they had obtained registration, also for manufacture of electrical stampings and laminations. They followed Central Excise formalities such as filing of classification list, issuing goods under cover of GP-1s/invoices and filing of periodical RT-12 returns. They had classified the impugned goods HV LV coil windings of both copper and aluminium under Chapter sub-heading 8504.00 of schedule I to CETA, 1985 in their classification lists filed since 1986. They had declared the item as under : Coil Windings for Transformers : 85.04 Same classification continued for the subsequent years or the subject goods. They were receiving sick transformers from various Electricity Boards for repair. The appellants replaced burnt coils in the sick transformers with HV LV coils of double paper coated (DPC) alumi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in between the layers. Adhesive is used for binding the extra insulting material. The ordinary wires supplied as such cannot perform or have such KVA handling capacity. The extra insulating material is provided to withstand the induced higher KVAs. These wires are in the same condition After winding required number of turns and layers, they are cut to be called as coils. No such connectors are required, as they are only wires, which will be used for any purpose. The cut ends are braced together to facilitate for connection with the load distribution. They are in continuous length weighing 10 to 30 kgs and even more also. They are in the coil form with specific number of turns (in detailed circular form) with layers having ID, OD and axial height These wires cannot be used without any specific design. Such wound coils function as primary or secondary depending upon the KVA of the transformers in which they are to be used/replaced based on the parameters like voltages, currents and cross-section of the wire. These wires cannot be placed as such to be used as primary or secondary. In fact, they do n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty Board v. CCE [1989 (44) E.L.T. 340 (Tri.)] in taking the view that the subject goods were only wire arranged in coil and nothing else; and on Punjab State Electricity Board v. CCE, Chandigarh [1995 (76) E.L.T. 313 (Tri.)] to hold that coils did not exist at any time as a marketable commodity. The Commissioner accordingly decided that coils had not emerged as a marketable item and they were aluminium/copper wires wound on the core of the transformers in the course of repair/re-conditioning of transformers. He observed that it had been incumbent on the part of the assessee working under Self Removal Procedure to intimate the department that they were only replacing DPC aluminium/copper wires during repair of transformers but they had withheld this vital information and misdeclared that they had been replacing coils. Their misdeclaration had been detected by preventive officers after investigation. He found that the Apex Court's decisions cited by the appellants were in cases of different facts. Accordingly he confirmed the demand of duty of Rs. 20,00,863.86, imposed equal amount of penalty under Section 11AC, demanded interest due under Section 11AB and imposed a penalty of Rs. 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Division vide Divisional Serial No. 184/91-92 dated 3-10-91 As explained by the appellants, coil windings are produced by winding wires with specific design supported with press board, craft paper, cotton sleeves and cotton tapes in between the layers. Adhesive is used for binding the extra insulating material in order to withstand the induced higher KVAs. The number of turns of each coil is decided on the basis of the requirement of the transformer to be manufactured i.e. for stepping up or stepping down a given voltage to obtain a desired voltage. The ends of the coil are braced together to facilitate connection with load distribution. The coils have predetermined inner diameter and outer diameter, axial height and weight depending on the voltage and current requirements. The cross-section of the wire used and the wire used (copper/aluminium) are also very much material and decide the voltage change desired. The impulse strength of the windings is prescribed for various voltages and this is tested with coils before fixing in the transformer. Thus it could be seen that winding coils are not just electric conductors or wires. 9. The coil with a single turn around a magnetic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he sick transformers in place of burnt coils as clearance as per the Central Excise Law. It is obvious from the above discussion that winding coils have a commercial name, different applications, are marketable and are goods different from electric wires which are just conductors of electricity. 13. As regards limitation, we find that the appellants had not suppressed anything relevant from the department and the department was aware of the activity undertaken by the assessee in relation to the subject goods. The appellants had classified the subject goods under the Heading 85.04 as far back as 1991 and much earlier in the case of M/s. Tamilnadu Transformers. The appellants had filed the classification lists regularly, indicating the same classification. They had furnished the pre-budget stock several years showing the closing stock of excisable goods including the subject goods. The units used to be visited by the departmental officers periodically including the audit parties. The appellants had also filed Rule 57G declaration for availing input credit where also the subject goods had been shown as final product. 14. M/s. Tamilnadu Transformers had manufactured coils following ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d or short-paid, or erroneously refunded by reasons of either fraud or collusion or wilful misstatement or suppression of facts or contravention of any provision of the Act or Rules made thereunder, with intent to evade payment of duty. Something positive other than mere inaction or failure on the part of the manufacturer or producer or conscious or deliberate withholding of information when the manufacturer knew otherwise, is required before it is saddled with any liability, before the period of six months . In ESPI Industries and Chemicals (P) Ltd. v. CCE, Hyd reported in 1996 (82) E.L.T. 444 (S.C.), the Hon ble Supreme Court held as follows : The department accepted this classification without demur. Having done so, it is difficult to understand how the department could take a somersault and contend to the contrary . These case law supports the appellants claim on limitation. 16. From the above discussion, it transpires that the coils come into existence separately before they are used to replace old coils of sick transformers or are used in the manufacture of new transformers. The ratio of the decisions of the Tribunal cited to the contrary effect therefore, appear to ..... 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