TMI Blog1989 (11) TMI 183X X X X Extracts X X X X X X X X Extracts X X X X ..... g under Tariff Item 52A(i) for which they had valid licence in Form L-4. The party, thus, was alleged to have contravened the provisions of Rules 9(1), 49,52A, 53,173B, 173F, 173G and 226 of the Central Excise Rules, 1944 as amended read with Section 6 of the Central Excises and Salt Act, 1944. The goods manufactured out of steel flats do not enjoy complete exemption under any notification, issued under sub-rule (1) of Rule 8 of the Central Excise Rules, 1944 since 1-8-1980 (after rescinding of Notification No. 75/67-C.E.). During the course of checking of the stock books of raw materials of the party for the accounting years (1980-81,1981-82,1982-83 and 1983-84 upto 27-5-1984 (accounting year beginning from 1st July and ending on 30th June next year), it was observed that the party had issued 3760-209 M.T. of steel flats during the period 1-8-1980 to 27-4-1984 and had manufactured and removed 3384-188 M. Tonne of goods (calculated after taking into account the maximum percentage of loss at the rate of 10% of raw material used in the case of iron and steel products) valued at Rs. 12,28,460.24 (Rs. 11,16,782.04 BED + Rs. 1,11,678.20 SED) as per Notification No. 209/83, dated 1-8-198 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6AA(ia) CET as it existed prior to 1-8-1983 and under Item 25(8) as it is after 1-8-1983. He has, therefore, confiscated the seized blank tools or tool blanks under Rule 173Q of the Central Excise Rules, 1944. Since the party failed to produce the seized goods in terms of the bond, provisionally released thereunder, he appropriated an amount of Rs. 20,000/- towards value of the goods and Rs. 6521.23p towards duty payable on such goods. He has also demanded duty of Rs. 12,28,460.24p on the forged product so removed without payment of duty during the period 1-8-1980 to 27-5-1984. A penalty of Rs. 2 lakhs was also imposed on the appellants for contravention of provisions of Rules 9(1), 49, 52A, 53,173-B, 173-C, 173-G, 173-F, 174 and 226 of the Central Excise Rules, 1944. 2. It is against the aforesaid order that the appellants have come in appeal before the Tribunal :- 3. In order to appreciate the controversy in hand it is desirable to set out the process of manufacture as given in para 12 (in the portion relating to discussion and conclusion ) of the impugned order :- Steel Flats are cut into pieces of the predetermined size and design. These cut pieces are known as blanks. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s grinding media (Stone Water) inside the barrel when it is rotated. Since this is only a preparatory operation for giving smooth surface to the spanner, the spanner can also be used without this operation. HARDENING :(d) The hardening is named because during this process the effect is to make the material more harder for better life. During this process the hardness of the spanner is increased. The material is already hard but to make it more harder to prolong life of the spanner, hardening process is carried out. These spanners are fed into the furnace and heated upto a certain temperature and then quenched into the water where it gets more harder to have better life. TEMPERING :(e) Tempering means softening and by this process brittleness is removed. The tempering is required only in case the material is hardened. The hardened material if fed into a tempering furnace at a certain temperature for some time and taken out from that furnace when the material gets softened and brittleness is removed. The spanner can also be used without hardening and tempering as Hand Tool. SHOT BLASTING :(f) This is a process wherein small steel balls ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all by the appellants, nor it is saleable at all. The learned consultant stresses that the department has not produced any evidence whatsoever that the product after fettling is marketed or marketable so as to come within the definition of goods as defined by the Supreme Court in a series of judgments starting from Union of India v. DCM [1977 (1) E.L.T. 199]. He submits that this very principle has been confirmed in a very recent judgment in the case of Bhor Industries Ltd. v. CCE, Bombay [1989 (21) ECR 273 SC] He further submits that the adjudicating authority s reliance on Delhi High Court s judgment in the case of Metal ForgingsPvt. Ltd. [1987 (32) E.L.T. 15] is misplaced because in that case the forgings after fettling were held to be known as a marketable product and were known to the market as forgings. In the instant case there is no evidence whatsoever regarding the marketability of the product. The product under consideration according to the appellants, is an incomplete, unfinished material in process at an intermediate stage . Accordingly, these cannot be considered as goods chargeable to duty under Section 3 of the Central Excises and Salt Act, 1944. 4.2 Apart from ..... X X X X Extracts X X X X X X X X Extracts X X X X
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