TMI Blog1981 (10) TMI 40X X X X Extracts X X X X X X X X Extracts X X X X ..... ted for additional layers of fibre-glass yarn and enamel coating to get the required insulation on the products. At the end of the process, the copper strips are insulated with fibre-glass yarn and bonded with enamel. 2. On April 18, 1968, the petitioner No. 1 filed a classification list under Rule 173B of the Central Excise Rules, 1944, and classified the products i.e. Varnish bonded glass-fibre covered rectangular copper strips/conductors under Tariff Item 26A(2) of the Central Excises and Salt Act, 1944 (hereinafter referred to as the Act). Item 26A refers to Copper and the Tariff Description of Item 26A(2) is "Manufactures, the following, namely : plates, sheets, circles, strips and foils in any form or size." The Excise Authorities accepted and approved the said classification. On March 1, 1975, by Finance Act, Tariff Item 68 was introduced imposing levy on all other goods not specified elsewhere. In other words, Item 68 is a residuary item covering goods not specified in Items 1 to 67. On March 16, 1976, Tariff Item 22F was introduced imposing excise duty on "Mineral fibres and yarn, and manufactures therefrom". Even after the introduction of the Tariff Items 68 and 22F, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iff Item No. 68 of the Act. The petitioners carried an appeal against the order of the Assistant Collector, but the appeal came to be dismissed by the Appellate Collector, Central Excise and Customs, Bombay, by an order dated October 6, 1978, a copy of which is annexed as Exh. N colly. to the petition. The Appellate authority took the view that the paper covered copper strips are different from the strips inasmuch as although both of them remain conductors the use of the two is different. The Appellate Authority felt that the bare copper strips are assessable under Tariff Item 26A(2), but when they are covered and insulated with paper or cloth, they become something different and are sold as insulated copper strips and are liable to levy of duty under Tariff Item 68. These three orders are under challenge in this petition filed under Article 226 of the Constitution of India. 4. Shri Andhyarujina, the learned Counsel appearing in support of the petition, submitted that the view taken by the authorities below is totally erroneous and the authorities have proceeded to hold that the insulated copper strips are liable to duty under Tariff Item 68 only on the ground that on insulation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evalent test is whether the article produced is regarded in the trade, by those who deal in it, as distinct in identity from the commodity involved in its manufacture. Commonly manufacture is the end result of one or more processes through which the original commodity is made to pass. The nature and extent of processing may vary from one case to another, and indeed there may be several stages of processing and perhaps a different kind of processing at each stage. With each process suffered, the original commodity experiences a change. But it is only when the change, or a series of changes, take the commodity to the point where commercially it can no longer be regarded as the original commodity but instead is recognised as a new and distinct article that a manufacture can be said to take place. Where there is no essential difference in identity between the original commodity and the processed article it is not possible to say that one commodity has been consumed in the manufacture of another. Although it has undergone a degree of processing, it must be regarded as still retaining its original identity." The Supreme Court was considering the claim as to whether there is an essentia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er Factory Ltd. v. Union of India and Others, and submitted that the use of the article was absolutely irrelevant in the context of determining as to which item of the Tariff would be attracted to a certain product. The reliance on the judgment of the Division Bench of this Court reported in 1980 E.L.T. 249 (Bom.) in the case of Garware Nylons Ltd. v. Union of India Ors. is also appropriate. The Division Bench in paragraph 7 of the Judgment observed that the mere application of a special process or giving it a different name cannot debar the article from being considered as a nylon yarn attracting the duty under Item 18 of the First Schedule. The Division Bench was considering the case as to whether the Nylon Twine is covered by Item 18 which deals inter alia with nylon yarn. The nylon twine is considered as a kind of nylon yarn with a special treatment to make it suitable for being utilised in the manufacture of fishing nets or cords. The Division Bench held that the special process applied to nylon yarn does not change its character as nylon yarn and therefore the mere application of the special process or the fact it is known in the trade by different name is no answer to excl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1978 is not without any merit. The learned Counsel invited my attention to the Circular dated August 30, 1962 and Board's letter, dated June 30, 1966 and pointed out that all along the Department felt that the paper insulated rectangular copper conductors are nothing but the strips covered by Item 26A(2), but that view was given a go-by in view of the Tariff Advice dated April 1, 1978 where in a conference it was decided that the strips on being insulated acquires a separate and distinctive character as a conductor and would tee assessable under Item 68 of the Tariff. It does appear that the Department decided to give go-by to its earlier view in view of this Tariff Advice which was obviously incorrect. Shri Andhyarujina invited my attention to an order dated July 4, 1978 passed by the Assistant Collector in the matter of M/s. Jayant Metal Manufacture Co. Ltd. and pointed out that though the Assistant Collector was satisfied that the insulated strips would be assessable under Tariff Item 26A(2), Item 68 was applied in view of the Tariff Advice. In my judgment, the reliance by the authorities on the Tariff Advice was totally irregular and the decision based on such advice cannot be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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