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TMI Blog2017 (2) TMI 672X X X X Extracts X X X X X X X X Extracts X X X X ..... ansformed structures from MS Rods, MS Channels etc. amounts to manufacture. The Tribunal held that there is no activity of "manufacture" attracting excise liability. The process of fabrication of columns, purlines etc. by cutting, drilling, punching and welding does not amount to manufacture - the appellants are held not liable for Central Excise duty - appeal allowed - decided in favor of appellant. - Excise Appeal No. 2935 of 2005 & Excise Appeal No 2950 of 2005 - A/56346-56347/2016-EX[DB] - Dated:- 30-12-2016 - Ms. Archana Wadhwa, Member (Judicial) and Mr. Rakesh Kumar, Member (Technical) Shri L.P. Asthana, Advocate for the appellant Shri Pramod Kumar, Jt. CDR for Respondent ORDER Per: Archana Wadhwa : The appellant is engaged in the production of goods like tower parts, structures, GT Line, V cross arms, HT/LT line materials, which according to the Revenue are manufactured items classifiable under chapter heading 7308.90 of Central Excise Tariff and liable to pay duty of excise. 2. The appellant were issued a show cause notice on 30.05.1990 raising demand of duty of ₹ 28,120/- for the period April 1986 to December 1986 alleging that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eas advanced from both sides. It has been held by the Tribunal in a series of judgments apart from the one quoted by the Ld. Advocate for example in the case of Tansi Engineering Works Vs. CCF, reported in 1996(88) ELT-407 (Tri.) that the process undertaken by the appellants by cutting to sizes the various duty paid iron and steel products, drilling holes in them joining them by welding does not amount to process of manufacture. No evidence has been brought forth on record by the Revenue that any new commodity known to the market emerges as such. The name, no doubt as given by the appellants, is only for the purpose of identification of the various parts fabricated by the appellant. They do not have any commercial identity . In view of the foregoing we are satisfied that the impugned order-in-appeal deserves to be set aside. We order accordingly and allow the appeal with consequential relief to the appellant. 24. In the subject matter it is not disputed that the party had purchased duty paid angles, channels and plates as their raw material. It is also not disputed that they in their workshop has subjected the goods to the processes of cutting to size, drilling, punching be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellant amounts to manufacture inasmuch as they result in emergence of a new identifiable product. For better appreciation we reproduce the relevant para of the impugned order: IV) In the instant case, the duty paid raw materials falling under Chapter 72, have been brought with a view to convert them into parts of transmission towers falling under Chapter 73. Such raw materials are cut to specific Engineering drawing and design specifications and are being subjected to several processes which are argued to be the process not amounting to manufacture. Subsequently such parts of transmission towers, which have now become parts of Special technological structures , are arranged in a systematic way to assemble at various places to firmly embed to the earth. Thus prior to their being embedded to earth permanently i.e. at the place of manufacture the raw material had lost its original uses and have now transformed itself into parts of technological structures. Hence, their subsequently being made part of permanent immovable structures after such site assembly by nuts and bolts, do not make them still to be treated as mere angles, channels, rods etc. in which shape and intended use ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and drilled with hole, which are fit with poles. Similarly plates are cut and bended in 'U' shape and subjected to holes. The angles are again cut into the requisite sizes and joint with big one and used for fitting of electric wires on the goods or used in DP structures etc. In nutshell, the appellant is undertaking the process of cutting of channels, plates and angles and subjecting them to hole with the purpose of putting the same to use. 8. The larger Bench of the Tribunal in the case of Mahindra Mahindra Ltd. vs. CCE, Aurangabad, Chandigarh, Kanpur Chennai 2005 (190) ELT 301 (Tri. LB) considered the various precedent pronouncement of law on the subject and decided that the activity of cutting, drilling etc of angles, rods, sections, tubes etc. amount to manufacture and the fabricated items acquired a distinct shape to suit the structural design, which would be falling under chapter heading 73.08 of Central Excise Tariff. While delivering the judgment the larger Bench deviated from the declaration of law by the Tribunal in the case of Aruna Industries vs. Collector- 1986 (25) ELT 580 (Tribunal). 9. However, it is seen that apart from the fact that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in the factory and thereafter removed to the site, the Tribunal held that the goods in question are excisable. In this case also the decision of the Tribunal in the case of Aruna Industries was not considered. 7. The Tribunal in the case of Wainganga Sahkari Sakhar Karkhana Ltd. v. C.C.E., Nagpur - 2002 (50) RLT 177 following the decision of the Tribunal in the case of Aruna Industries. Revenue filed appeal against this decision of the Hon ble Supreme Court dismissed the appeal filed by the Revenue reported as C.C.E., Nagpur v. Wainganga Sahkari S. Karkhana Ltd. - 2002 (142) E.L.T. 12. The Hon ble Supreme Court upheld the decision of the Tribunal in the case of Aruna Industries. Further, we find that the Hon ble Bombay High Court in the case of Sunflag Iron Steel Co. Ltd. v. Additional Collector of C. Ex., Nagpur reported in 2003 (162) E.L.T. 105 (Bom.) after relying upon the decision of the Tribunal in the case of Aruna Industries and other decisions held that fabricated material was not excisable goods. Revenue filed appeal against this appeal before the Hon ble Supreme Court and the Hon ble Supreme Court dismissed the appeal reported as 2004 (164) E.L.T. A178 . 10. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at Sehore, manufacture parts of Transmission Towers such as HT Lines 11KV 'V' Cross Arms , 11 KV top Clamps , DC-8'Centre , U Clamps , Four Pin Arms , Thick Washers (non threaded) , Tie bracing etc. classifiable under sub head 7308.90 of the Central Excise Tariff. The above items are manufactured from MS Angles, Channels, Plates etc. by subjecting the same to the process of cutting to the required size, drilling holes, riveting, welding etc., as per the drawings and specifications. The period of dispute in these appeals is from April' 1986 to December' 1986 and from June 1999 to March 2003. 14.1 The duty demand of ₹ 28,120/- pertains to the period from April 1986 to December 1986. The duty demand had been confirmed by the Assistant Commissioner along with imposition of penalty of ₹ 10,000/-. The matter travelled up to the Tribunal who vide Order-in-Appeal dt. 23.04.99, set aside the Assistant Commissioner's Order. This order of Tribunal was challenged by the Department before the Hon'ble Supreme Court who vide Order dt. 19.04.02 remanded the matter to the Tribunal for de novo decision after examining as to whether the process und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ese judgments which have to be followed, not the Larger Bench judgment in case of Mahindra Mahindra Ltd. (Supra). 16. The Tribunal in the case of Aruna Industries, Vishakhapatnam Others (Supra) had examined the question as to whether making of structural like trusses, beams, girders etc. from raw-material such as plates, channels, angles etc. by subjecting them to cutting, drilling, riveting etc., is a manufacturing process and whether such trusses, beams, girders so fabricated would attract excise duty under tariff items 68 of the then Central Excise Tariff. During the period to which the dispute in the case of Aruna Industries, Vishakhapatnam Others (Supra) pertained, tariff items 68 of the Central Excise Act Tariff covered the goods not elsewhere specified and as such in the Central Excise Tariff, there was no tariff item similar to the heading 73.08 of the HSN based Central Excise Tariff which come into force w.e.f. 28.02.1986. Tariff item 73.08 of the HSN based tariff which came into force w.e.f. 28.02086, specifically covers Structures excluding prefabricated buildings of heading no.94.06 and parts of structures, (for example - bridges and bridge sections, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rticular process or processes result in emergence of a product with new and distinct commercial identity and usage is a question of fact, which has to be examined in each case. 17. The point of dispute in the present case is as to whether fabrication of HT Lines , 11 KV V ' Cross Arms , 11 KV top Clamps DC-8'Centre , U Clamps Four Pin Arms , Thick Washers (non threaded) , Tie bracing etc. which are parts of Power Transmission Towers and are fabricated from MS Channels, Plates and Angles would be liable to Central Excise duty under heading 73.08. These items, as explained in para 6 of the judgment of my learned sister, are fabricated by subjecting the MS Channels, Plates, Angles to the process of cutting, drilling of holes, welding etc. After these process the angles, channels and plates no longer remain the angles, Channels and Plates but get converted into identifiable parts of the Transmission Towers. It would be absolutely incorrect to call the HT Lines 11KV V Cross Arms , 11 KV top Clamps , DC-8'Centre , U Clamps Four Pin Arms , Thick Washers (non threaded) etc. as mere Angles, Channels and Plates. In my view, therefore, by process unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , arranged in a legal and logical structure and is supported by well defined rules to achieve uniform classification. The system is used by more than 190 countries and economics, as a basis for their Customs Tariff and for collection of international Trade Statistics. Over 98% of the merchandise in international trade is classified in term of the HSN. Further, Tribunal has observed that:- the Harmonized system is thus a universal economic language and code for goods and an indispensable tool for international trade . Thus the Harmonized System of nomenclatures on which the Central Excise Tariff (in force since 28.02.86) is based, is an international catalogue of the commodities traded across the world. Therefore any item mentioned in the Central Excise Tariff, which is also covered by HSN, has to be treated as marketable and there is no need to prove its marketability. Heading 73.08 of the Central Excise Tariff during the period of dispute, is based on HSN heading 73.08 and therefore all the goods covered by it have to be treated as marketable. The goods, in question, which are Transmission Tower parts, have, therefore, to be treated as marketable. 20. In view of the above dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the view that such an activity did not amount to manufacture. In that case also, structural materials were prepared from the MS rods, MS channels, and mild steel flats. The case of the appellants squarely stands covered by the ratio of law laid down in that case and as such, no duty demand could be confirmed against them. That order of the Tribunal has already attained finality. Even the Apex Court has upheld that order by dismissing the appeal of the Revenue as reported in 1996 (82) E.L.T. A158 Court Room Highlights The Revenue filed civil appeal No. 500 of 2006 in the Hon'ble Supreme Court against this order. The Hon'ble Supreme Court in their order dated 31/07/2015 held as below : 7. We are of the opinion that the mater is squarely covered by a recent judgment of this Court in M/s Servo Med. Industries Pvt. Ltd. vs. CCE, Mumbai - 2015 (319) E.L.T. 578 (S.C.) . As the issue stood resolved in their favour, the learned Counsel submitted that the goods in dispute are not liable to Central Excise levy. 3. The learned AR supported the view expressed by Hon'ble Member (Technical) in the interim order. He further placed reliance on the written submission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndia, the High Courts are simply bound by the decision of the Supreme Court. The sub-silentio and per- incuriam exception are for each tier to apply on its own level, they just do not empower a Court bound by a decision not to feel bound by it. If it is held that the sub-silentio and per-incuriam rules can be used by a Court bound by the decision, it will amount to empowering such Court to examine the correctness of the decision, a fallacious proposition. 7. Apart from the legal position on binding nature of the decision of the Hon'ble Supreme Court that too in the appellant's own case on same set of facts, I also note that the reliance placed by the Revenue on the decision of Hon'ble Supreme Court in Man Structurals Ltd . (supra) is not appropriate. In the said case, the Hon'ble Supreme Court after detailed examination, categorised the various case laws on the subject of manufacture into four groups. The matter was remanded back to the Tribunal for decision afresh. It is clear that the Hon'ble Supreme Court did not decide on merit the said case. Further, When there is a decision of the Hon ble Supreme Court in appellant s own case, reference to any other ..... X X X X Extracts X X X X X X X X Extracts X X X X
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