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TMI Blog2019 (5) TMI 214X X X X Extracts X X X X X X X X Extracts X X X X ..... re, the question of any onsite manufacture in the demand raised does not arise. Whether the goods in question need to be welded for them to fall under 7306 69 00? - HELD THAT:- A plain reading of the Tariff heading does not say so. It is true that there are other Tariff headings such as 7306 40 00 and 7306 50 00 which covered only welded products. However, the main four digit heading 7306 includes nonwelded products or open seam products. Therefore, the product in question gets squarely covered by 7306 69 00. Whether this heading existed during the entire period of limitation? - HELD THAT:- During the period 2006-07, Chapter heading 7306 69 00 did not exist at all but it was introduced subsequently. Since the demand is under this heading, the demand to the extent it pertains to prior to 2007-08 has to fail. The amount has to be accordingly re-quantified. Whether the prayer portion of the appeal by the department before the first appellate authority being incomplete adversely affects the demand? - HELD THAT:- although the prayer part of the appeal by the department does not cover the issue of manufacture of excisability, these issues were clearly covered in Para 12 of their ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted ducts or hollow pipes classifiable under Chapter heading 7306. This process involved use of two machines viz., Sintra 110 Duty Machine and Duct Flattening Machine . The department came to a conclusion that the appellant was manufacturing these ducts from strips and the ducts so manufactured are liable to excise duty which the appellant has wrongly not discharged and that they have also not obtained Central Excise registration. It is the case of the revenue that the process undertaken by the appellant results in a product which has a distinctive name, character and use. It is capable of being marketed and was indeed being marketed, though not by the appellant, on several websites. Since a new distinct commodity as known to the market has come into existence and since such product is also marketable, the appellant is liable to pay excise duty. However, the appellant were not marketing this product but were using these products in their works contracts at various locations in their construction sites after transporting them to the sites under cover of delivery challans. Sometimes these products are also sent to the appellant s other locations outside Hyderabad as stated by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... second argument is that the demand has been raised under Chapter heading 7306 69 00 as products of other non-circular cross section. However, they have not welded their products and therefore, they are not covered by this chapter heading, in view of the specific requirement of welding in 7306 40 00 and 7306 50 00 which immediately precede the heading 7306 69 00. The relevant portion of the chapter heading is as follows: 7306 - Other tubes, pipes and hollow profiles (for example, Open seam or welded, riveted or similarly closed) of iron or steel - Line pipe of a kind used for oil or gas pipeline: 7306 11 00 -- Welded, of stainless steel kg. 7306 19 -- Other: --- Galvanized pipes: 7306 19 11 ---- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng under 7306 69 00 during 2006-07 in the Tariff at all. It was introduced only in the subsequent year and therefore, the demand to that extent has to fail. His fourth point of argument was that the prayer of the department in the appeal filed before the first appellate authority speaks about an exemption notification only and it does not talk about the manufacture of the product or its marketability. He, further, submits that there are no elements of wilful suppression of facts which can be attributed to the appellant and therefore, extended period of limitation cannot be invoked. He would, further argue that if they are liable for payment of Central Excise duty, they also have been eligible for benefit of Cenvat Credit. Lastly, he would argue that even if the demand is held against them, the penalty may be waived. 8. Countering the arguments of the appellant, the learned departmental representative submits that demand in the show cause notice is only to the extent the goods were manufactured in the assessee s Plants at Balanagar and Gachibowli and transported by delivery challans as can be seen from the show cause notice and not on the goods manufactured at site. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decided is whether the appellant was manufacturing goods or not. Clearly, the inputs were GI Strips while the final products were GI Ducts of non-circular cross section. Thus, they fall under different Tariff headings, the final products being under 7306 69 00. It is also evident that a distinct marketable commodity as known in the market and as is sold in the market under a different name comes into existence. It is immaterial for levy of excise duty that the appellant themselves were not marketing these products. The second question is whether they get exempted by virtue of the fact that they were manufacturing these products at site. Clearly, we find that the show cause notice was restricted only to the extent where goods were manufactured by them in their factory and transported under the cover of delivery challans. Therefore, the question of any onsite manufacture in the demand raised does not arise. The third issue to be decided is whether the goods in question need to be welded for them to fall under 7306 69 00. A plain reading of the Tariff heading does not say so. It is true that there are other Tariff headings such as 7306 40 00 and 7306 50 00 which covered only welded p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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