TMI Blog1985 (9) TMI 188X X X X Extracts X X X X X X X X Extracts X X X X ..... 55/72 dated 15-6-1972 duty being collectable only on quantity in excess of 5 MT; (v) the special excise duty should have been calculated at the rate of 5% and not at the rate of 10%; and (vi) whether the imposition to penalty and redemption fine in respect of confiscated goods and confiscation of land, building, plant, machinery and materials with option to redeem the same on payment of fine of Rs. 10,000 are legal and justified. 2. The appellants are engaged in printing of duty-paid aluminium foils on job work basis falling under Tariff Item 27 (c). The duty paid aluminium foils are received by the appellants mainly from pharmaceutical concerns. It appears that the appellants had filed a classification list No. 1/79 claiming concession under Notification No. 155/72. The appellants argue that they were under bona fide belief that so long as their clearances were below 5 MT they were not required to pay any central excise duty and on the clearances exceeding 5 MT they were required to pay duty only on quantity in excess of 5 MT. The appellants were clearing the printed foils without payment of duty on their own serially numbered delivery challans without maintaining any exc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f demand of duty was also challenged and it was asserted that duty if at all payable would work out to Rs. 54,737.20 and in respect of the seized goods the appellants had already paid duty amounting to Rs. 22,104 on provisional release. Thus, the total duty if at all payable would be Rs. 27,633.02. Before the Tribunal further reliance was placed on Notification No. 71/72-C.E. dated 17-3-1972 as in force at the relevant time. The Collector of Central Excise, Bombay I, after following the usual procedure and hearing the appellants negated all the pleas and demanded duty, imposed penalty and redemption fine and ordered confiscation on land, building, plant, machinery and material as already set out above. Aggrieved, the appellants have filed present appeal to the Tribunal. 3. At the hearing of the appeal the appellants sought leave of the Bench to raise an additional ground, i.e. claiming benefit of exemption Notification No. 77/72-C.E., dated 17-3-1972 as in force at the relevant time. Permission to do so was granted and arguments then proceeded with. 4. The first contention of Shri V.J. Tarapurwala, the learned Advocate for the appellants, is that printing of duty paid alumini ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... b-item. Strongly relying on the Supreme Court decision which is a case relating to Item 16-B dealing with Plywood, he submitted that the words used in the two Items are similar and the decision given by the Supreme Court in relation to plywood could squarely be applicable in case of aluminium foils covered by sub-item (c) of Item 27 of CET. 5. Shri H.L. Verma, learned SDR invited the attention of the Bench to the Classification list filed by the appellants which is available at page 2 of the Paper Book. According to this list, the appellants admitted that printing of aluminium foils constituted manufacture within the meaning of Item 27(c) of CET and the appellants having made this admission it was not open to the appellants to claim that printing of foils did not constitute manufacture. He also stated that the scheme of the words used in the sub-item indicated that the intention was to charge duty at every stage mentioned in the Item and each stage constituted manufacture to attract levy of central excise duty. In support of his argument he relied on Supreme court decision in J K Steel Ltd. v. Union of India Others (1978 E.L.T. J 355). Relying on Hyderabad Asbestos Cement Pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ocks, boards or the like. In other words, this item makes it clear that the excise duty is payable on plywood whether in sheets, blocks, boards or the like at the rate of l5% ad valorem, except in the case of plywood for tea-chests; and in case of plywood for tea-chests when cut to size in panels or shocks and packed in sets, duty payable is 10% ad valorem. And in the end, which according to Shri Tarapurwala is the crucial observation, they observed as under : No question of double taxation arises as duty is leviable only once on the plywood as it comes out of the press in the panel or block stage and no further duty is to be levied on the circles which are made out of the plywood blocks or panels. An examination of sub-item (c) extracted above in comparison with Item 16-B dealing with plywood examined in the light of the foregoing shows that the intention of the sub-item is to charge duty once on foils whether or not they be in any of the stages mentioned in the sub-item and otherwise fulfilling the condition of thickness set out therein. It is also significant that Section 2(f) (viii) of the Act as amended in 1980 in relation to Aluminium refers to lacquering or printing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot require any decision from us. For purposes of record, however, we might state that Shri Verma representing the respondents stated that demand of special excise duty should have been calculated at the material time at the rate of 5% and not at the rate of 10%. As a result of the aforesaid discussion we hold that appellants could not be called upon to pay duty on the job work of printing on duty-paid aluminium foils. The demand of duty therefore from them and imposition of penalty, confiscation and redemption fine are set aside and the appeal allowed. 10. [Order per : H.R. Syiem, Member (T)].-Once a duty has been recovered on an article, that duty cannot be recovered again on that article. It would be a different proposition if the law permits this : for example, the law can say that duty X can be recovered on a given article chargeable with it, three times. That means an article chargeable with duty X will have to bear this X duty three times. At present the law does not say so and therefore no one can do so. If article A has paid a duty that duty cannot be recovered on it again. An extension of this principle is that as long as the article remains in the same category or gro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bricated into a wire bar or wire rod, it will have to pay duty under Item 27(a)(ii). The reason is simple - this wire bar or wire rod has not paid the duty under Item 27(a)(ii) - the duty it had paid, duty under Item 27(a)(i), was for another form commodity, ingot. A plate of aluminium which has paid duty under Item 27(b) can be charged to duty again under Item 27 (d) if it is fashioned or shaped and made into a pipe or a tube. Though the substance is the same, aluminium, the tariff headings/groupings are different: one is a heading for ingots, the other a heading for wire bars, each carrying a separate duty for the group of commodities it covers. But the duty paid aluminium ingot will not attract duty if it is changed into a slab, because as slab it would have to pay the same duty it paid when it was in the form of an ingot. However, when the slab changes into a wire rod, the wire rod cannot be said to have paid the duty that the bar paid and therefore, fresh duty will have to be paid on the wire rod under Item 27(a)(ii). 13. We do not have that situation in this case. The foil item is only one, namely FOILS", of thickness not exceeding 0.15 mm. All foils embossed or not, perf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t no matter what, if a thing acquires anything it did not have before, it must pay duty again under the same item or under Item 68. It may be only a change of colour, or it may be a change from square to circular, or it may be laminate of two layers instead of the single unlaminated sheet - but the call goes forth that a product has appeared which deserves the honour of paying tax. And to crown it, there have been instances when a product that was classified as a good-not-elsewhere-specified was again said to have changed, and changed into what ? into a good-not-elsewhere-specified; and all because it was concentrated by having unwanted associated impurities separated by mechanical means. In this present dispute, a foil has become a foil and, therefore, so goes the central excise argument, must pay foil duty once again. 16. All this is because people have understood every alteration, every modification, every adaptation, every improvement, in fact, everything that in their opinion looks like a change, to mean a change equivalent to a manufacture and that every such manufacture must be visited with excise duty, the basis for this understanding being the famous DCM judgment. That ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is the question we need to answer, and not Has there been a manufacture ? Because even if there has been a manufacture, as long as there has not been a manufacture of excisable goods, the central excise laws are not activated. A mechanical application of the formula of manufacture can lead to incorrect results. If we take the DCM case, there had clearly been a manufacture, some manufacture, when the raw oil was bleached and neutralized. The resultant oil was certainly a different oil in more ways than one - it was a whiter (less coloured) oil and much less acidic, and there have appeared operations which, very frequently in central excise contractions, have been taken to signify the emergence of a manufactured product and indeed that was what the department did in that case. The Supreme Court ruled that until the manufacture reaches such a stage that a marketable goods is produced and capable of entering the tariff item prepared for it, it does become subject to the duty sought to be put on it. All this was in the context of a change or changes that required a determination if the article or product sought to be levied to excise duty should bear that duty, a duty it had never ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a printed aluminium foil. I wonder whether a sheet of metal painted with a name, has become a product with a new use, whether its use as a sheet of metal has been lost. I think not. 21. It is frequently advocated that name, character, use are to be read as single alternates i.e. if any one of them is satisfied, then there has been a manufacture, and all the consequences will - follow. There are a good many encumbrances to this rendering. To take use; under this explanation, if material has acquired a new use, it is enough to qualify as a new product, though its name and character remain unchanged. Then will a chemical become a new manufacture because one day a hitherto unknown property is discovered in it, such as, say, an ability to neutralize aflatoxins ? Its name and character are the same but it has been put to a new use, the new use being due not to any change in its nature but to the discovery of an unsuspected attribute. It has a new use -one it did not have before. Has it become a new manufacture ? Will it attract fresh excise duty ? And if a second chemotherapic property is discovered a year later, will it be charged duty a third time ? Or will duty be charged for ever ..... X X X X Extracts X X X X X X X X Extracts X X X X
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