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TMI Blog2002 (5) TMI 50X X X X Extracts X X X X X X X X Extracts X X X X ..... actured and cleared by the appellant during the period June, 1982 to August, 1982 and issued letter dated 12-8-1982 asking the appellant to furnish details of the sets cleared and to explain why duty should not be demanded on such sets and why action should not be taken for contravention of Central Excise rules. However, the appellant did not furnish the required information. Thereafter, the Superintendent issued a show cause notice dated 6.12.1982 asking the appellant why a duty of Rs. 5,58,000/- due on 56 sets of VTRs and colour monitors should not be demanded under Section 11A of the Act and another show cause notice dated 2-4-1983 was issued for Rs. 1,78,500/- due on 17 sets of VTRs and colour monitors. The appellant in response gave replies by letters dated 31-1-1983 and 11-2-1984 respectively. 3.On 9-6-1983, the Central Excise Officers searched the factory of the appellant and on 14-6-1983 the Offices of the Directorate of Anti-Evasion searched the factory premises on 20, K.H. Road, Bangalore. 20 Nos. of VTRs were detained which were reported to have been brought there from the factory of the appellant at Palghat. The Manager was not able to produce any document to show that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion filed by the appellant under Section 35-F of the Act for reference was also rejected on 1-9-1998. Hence, this appeal. 6.Before us, Mr. Raju Ramachandran, learned Senior Counsel urged that (1) fastening imported disassembled VTRs with colour monitors did not amount to manufacture within the meaning of Section 2(f) of Central Excise & Salt Act, 1944; the fasteners had also been imported alongwith disassembled VTRs and colour monitors; VTRs with colour monitors were not liable for payment of excise duty as the countervailing duty applicable to the same at the time of import under tariff item had been paid; (2) the demand of duty was grossly barred by limitation; the Commissioner and Assistant Commissioner could not issue separate show cause notices; the very fact of Assistant Collector issuing notices earlier clearly shows that the Department was fully aware of the import of the disassembled VTRs alongwith the colour monitors and assembling of the same and selling them; there is no averment in the show cause notice of any willful suppression of any material fact or fraud or misrepresentation. Hence, the extended period of limitation could not be invoked. 7.Per contra, the learne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to case. When a change takes place and a new and distinct article comes into existence known to the consumers and the commercial community as a commercial product, which can be no longer regarded as the original commodity, such a change constitutes a process of manufacture. 11.It is not disputed that the imported kits of components of VTRs and colour monitors in SKD condition were items falling under Item 68 for levy of countervailing duty. It is clear from the material placed on record that by the process undertaken by the appellant a change is brought about facilitating the utility of the product for which they were meant. In other words, pursuant to the process, a transformation has taken place at the hands of the technical experts or skilled persons and not by laymen, which made the product to have a distinct character and use. Such product of VTR/colour monitor as finished product was classified under Item 37BB. 12.The Collector as well as the Tribunal recorded a finding of fact based on the material placed on record that the assembly of imported kits of components into VTRs/colour monitors by using the fasteners constituted the process of manufacture and rightly so in our ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y be goods as known in the excise laws and may be dutiable. The appellant in this case claims to have manufactured only the indicator system. If the indicator system is a separate part and a duty had been paid on it and if the rules so provide then the appellant may be entitled to abatement under the rules. But if the end product is a separate product which comes into being as a result of the endeavour and activity of the appellant then the appellant must be held to have manufactured the said item. When parts and the end product are separately dutiable - both are taxable." 14.This being the position, in our view, the Tribunal was right in its conclusion that the appellant was liable to pay duty on the end product. The decisions cited before us by the learned Counsel for the appellant in support of his stand were considered by the Tribunal and rightly distinguished on facts. We do not think it necessary to consider them again. 15.The Collector as well as the Tribunal on detailed examination of facts and looking to the conduct of the appellant in delaying to give reply to the show cause notices and not giving necessary intimation to the Department before clearing the products manuf ..... X X X X Extracts X X X X X X X X Extracts X X X X
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