TMI Blog1987 (4) TMI 205X X X X Extracts X X X X X X X X Extracts X X X X ..... les were cut from duty paid aluminium strips, and since circles and strips fell in the same sub-item, no duty would be leviable on the circles. Furthermore, the circles came into being only as intermediate forms in the manufacture of utensils and were not sold by them or cleared by them from the factory. They were accordingly, not liable to duty. 4. Mr. Jain the learned Councel for the department said that a circle is a different goods obtained from the strip; it may be true that strip was duty paid, but as soon as circles are cut out of it, a new article came into being with a new name, a new character and a new use. Therefore, in keeping with various High Courts and Supreme Court rulings, the circles being a new manufacture as understood in section 2(f) of the Central Excises and Salt Act, it must pay duty as a fresh item. Furthermore, a circle is an item in the heading under item 27 of the Central Excises and Salt Act and strip is another. Therefore having been specifically named as a commodity under the tariff, it is natural and right that the circle, when it appears for the first time, from whatever raw material, should pay duty. He said that in the Hyderabad Asbestos case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing recovered, but a different duty under a different heading. 8. In the case before us, item 27(b) covered plates, sheets, circles and strips shapes and sections. These products were assessable with the same rate of duty or we might say, one rate of duty, meaning thereby, that in whatever form the aluminium may be, if it is one of these forms, it is liable to this duty. The duty is the same whether the aluminium is presented for assessment as a sheet or a circle or a plate or a strip. This grouping carrying one duty, presents one item or heading, and once that item or heading duty is paid, then any article in the group will remain duty paid under that sub-heading even though it changes its shape or forms from one into any of the others in the group; were that not so there would be a serious anachrosim in the system. A plate in general is an aluminium product with plane surfaces and right angled corners; the opposite sides are equal. The sheet would be of the same dimensions except that it would be thinner than the plate. These two products can be put into circles, a form with plane surfaces but bounded by points equidistant from its center. It is not difficult at that stage to c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... carried but by the petitioner company amount to bringing into existence different and distinct goods, commercially known as such, to attract levy of duty under section 4 of the Central Excises and Salt Act, 1944. In para 23 it quoted a decision in 1978 E.L.T. J 389 in which it observed : The rolling of a billet into a circle is certainly a process in the course of completion of the manufactured product, viz. circles. In the present case, as we have already indicated earlier, the product, that is sought to be subjected to duty, is a circle within the meaning of that word used in item 26A(2). In the other two cases which came before this court, the articles mentioned in the relevant items of the First Schedule were never held to have come into existence so that the completed product which was liable to excise duty under the First Schedule, was never produced by any process". 12. The Supreme Court saw manufacture under the central excise laws as a manufacture of articles mentioned in the relevant items of the First Schedule; when such articles come into existence as completed product and liable to excise duty under that schedule, there would be a tax. We must not forget that al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dings. 15. The appellants received 42403 Kgs of aluminium strips in coils from M/s Hindustan Aluminium Corporation Limited, Renukoot, Mirzapur. They did not show the item in their raw-material accounts. The appellants were manufacturing circles out of aluminium strips and have not make necessary entries in the R.G.1 register as having manufactured circles. These circles were also removed by them from the factory without cover of gate passes. The circles made out of 2526 Kgs. of aluminium strips were more than 1.22mm of thickness and exceeded the exemption limit to attract central excise duty under tariff item No. 27(b). Since the appellants had contravened the provisions of Rule 173-F of the Central Excise Rules, 1944, a show cause notice was issued to them during May, 1975. The appellants received the notice on 14-6-1975 and in their reply urged that the strips had suffered central excise duty at 40% as could be seen from the invoices. The appellants were converting the strips into domestic utensils. They have maintained accounts for the utensils manufactured. The appellants are not manufacturers of circles and have not manufactured the same for its removal as circles. In the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Section 2(f) as the definition includes all processes incidental or ancilliary to the completion of the manufactured product. In this case it is not open to the appellants to contend that circles are only the intermediary product for the manufacture of domestic utensils. For that matter even intermediary products are liable to excise duty. The mere fact that they are not removed from the factory would not be a factor because the taxable event is the manufacture of the goods. In 1985 (20) E.L.T. 280 (Delhi) = 1985 E.C.R. 1337, M/s Metal Forgings Pvt. Ltd. and Another v. Union of India and Others, the Hon ble Delhi High Court has observed as under : An intermediate product which is by itself an excisable article is liable to excise duty even though it is not removed from the factory because the duty of excise is on manufacture or production of goods. The taxable event is the manufacture of the goods and not their removal from the place of the manufacture. 18. The identical question as the one involved in the present proceeding came up for decision in 1984 (18) E.L.T. 319 (Tribunal) = 1984 E.C.R. 1824, M/s. Lallubhai Amichand Ltd., Bombay v. Collector of Central Excise, Bo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le words which are not indicated therein. If a contrary view is to be taken then the principle should apply to other group entries as well. Item 26AA(ia) refers to bars coils, girders, beams, etc., under the same sub-heading. The same amount of duty is prescribed; but one cannot hold that a conversion of bars,, into angels or rods into girders" would not be liable to duty, even though the raw-materials are duty-paid. 20. The concept of manufacture is well-settled and the members principles have been emphasised from the earliest decision in the case of Delhi Cloth and General Mills [AIR 1963 S.C. 791 = 1977 (1) E.L.T. (J 199) (S.C.)]. In the recent decision of the Supreme Court reported in 1985 (20) E.L.T. 179, Empire Industries Ltd. and others v. Union of India and others, the Court has laid down in paragraph 30 as follows : The taxable event under the Excise Law is manufacture . The moment there is transformation into a new commodity commercially known as a distinct and separate commodity having its own character, use and name, whether be it the result of one process or several processes manufacture takes place and liability to duty is attracted. This observation proves ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iffer. Where there is an agreed formulation by them, as in the present case, it would not be open to the President, on the basis of a request from either party, to make an addition or amendment. The learned advocate accepted this position. 4. The Bench also pointed out to Shri Kameswara Rao that there was a decision of the Tribunal which would be relevant to the case, though not referred to by either of the two learned Members. This was the decision of a Larger Bench of the Tribunal in the case of Guardian Plasticote Ltd., Calcutta v. Collector of Central Excise, Calcutta and Others. [1986 (24) E.L.T. 542 (Tribunal)]. It was suggested to the learned advocate that he might take this decision into account while making his submissions. 5. The learned advocate submitted that the view taken by Member Shri H.R. Syiem was correct, and should be agreed with. If this was done, the appeal would succeed. He cited a number of decisions in support of the appellants case. Although it was stressed by the Bench that the present hearing was only with reference to the point of difference as formulated by the learned Members of the original Bench, the authorities cited by the learned advocate ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me Court in the case of Union of India and Others v. Tata Iron Steel Co. Ltd. (A.I.R. 1976 S.C. 599). This case related to excise duty on steel ingots manufactured from duty paid ingot moulds and bottom stools, in admixture with non-duty paid scrap and hot metal. It is judgment, the Supreme Court had observed that there cannot be double taxation on the same article . 10. Shri Kameswara Rao accordingly submitted that the view of Member Shri Syiem was correct. 11. On behalf of the Department, Shri Jain s first contention was that sub-item (b) of Central Excise Tariff Item 27 read as follows :- manufactures, the following, namely, ............ circles Since circles (of aluminium) had been specifically mentioned in the category of manufactures , it was not open to the appellants to contend that the circles were not manufactures or had not been manufactured. In this connection Shri jain referred to para 7 of the Supreme Court judgment in the case of Union of India v. H.U.F, Ramlal Mansukhrai, Rewari and Another [1978 E.L.T. (J 389)]. He submitted that once an article is specified in a tariff entry the question of interpreting the entry does not arise. Shri Jain also submitt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ra Pradesh Others (1975 1 S.C.R 440); Supreme Court in the case of Avinder Singh etc. v. State of Punjab Another etc. [1979 (1) S.C.R 845]; Madras High Court in the case of Brakes India Ltd., Madras v. Superintendent of Central Excise, Madras and Others [1986(26) E.L.T. 211 (Mad.)]; Andhra Pradesh High Court in the case of M/s. Bhadrachalam Paper Boards Ltd., Khammam v. Collector of Central Excise Customs, Hyderabad [1984(18) E.L.T. 229(A.P.) = 1984 E.C.R. 1627 (A.P.)]} Tribunal in the case of Union Carbide India Ltd., Calcutta v. Collector of Central Excise, Madras [1983 E.L.T. 549(CEGAT) = 1983 ECR 552D (Cegat)]; Tribunal in the case of M/s. Ceakay Rubber Industries, Changanacherry, Kerala v. Collector of Central Excise, Madras [1983 ECR 687D (Cegat)]; Tribunal in the case of Mahindra Engineering and Chemical Products Ltd., Pimpri, Pune v. Collector of Central Excise, Pune [1984(18) E.L.T. 680 (Tribunal) = 1984(4) ETR 249]; Tribunal in the case of Jai Hind Process and Printing Depot, Rajkot, v. Collector of Customs Central Excise, Ahmedabad [1985 (22) E.L.T. 195 (Tribunal)]; and Tribunal in the case of British India Corporation Ltd., Dhariwal v. Collector ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... minium circles might have come into existence, there was no manufacture of circles, because the end-product was the aluminium utensil; (2) Mere cutting of aluminium strips into circles would not amount to manufacture; (3) Change of identity of an article during repairs would not amount to manufacture. In his turn the learned S.D.R. cited authorities against these propositions. As was pointed out to Shri Kameswara Rao at the outset, the present Bench is concerned only with the point of difference between the two learned Members constituting the original Bench. It is on this point that the President has to give his decision and he cannot entertain requests to vary the point or to add other points. This aspect has been dealt with in para 11 in my order in the case of M/s. Jayashree Insulators Ltd., Hooghly v. Collector of Central Excise, Calcutta-II [1987 (28) E.L.T. 279 (Tribunal)], and I need not repeat those observations. Therefore, with great respect to the learned advocate, arguments as regards points on which the Members of the original Bench did not differ are not of relevance so far as the proceedings before me are concerned. 24. The point of difference, as formu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the only basis for Shri Syiem s disagreement with Shri Santhanam was that the article circle on which duty was sought to be recovered, was mentioned in the same tariff entry as the article strip in which capacity duty had already been recovered. His disagreement was not on the ground that the process was not one of manufacture, or that circles could not be charged to duty because they did not form the end-product In other words the disagreement between the two learned Members was only on the question whether the levy of duty on the circles, which admittedly came into existence as an intermediate product, would constitute double taxation or repeat taxation and for that reason be impermissible. This is the only question which I have to consider for the purpose of the present reference. 25. Both sides had cited authorities in regard to this question. It is clearly one regarding which much could be said on both sides. However, it is not necessary to consider this question from first principles. This is because, as was pointed out to the learned advocate for the appellants at the outset, there is a Larger Bench decision of the Tribunal on this very question, in the case of Guar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lamination. This process of lamination made the two layers of kraft paper impervious to water and oil and the resultant product was therefore, specially suited for packing ammunition. That was why the same was being exclusively supplied to the Defence Department. Since therefore, the process of lamination, which amounted to manufacture, led to the emergence of a new and distinct commercial product, marketable as such, the conclusion is inevitable that this new product would invite imposition of duty, though there may not be any move away from tariff Item 17 or even from one sub-heading to another. The argument of Shri Gupta is that Tariff Item17(3), as it then stood, related to packing and wrapping paper and since kraft paper was packing and wrapping paper and the laminated product was also packing and wrapping paper, there was no case made out for imposition of duty once over on the resultant product. This argument, for the reasons stated earlier, cannot be accepted." (Emphasis added). Thus, the Tribunal had before it the very question of double taxation which has been raised in the present case. The specific question raised was whether in a case where duty-paid kraft paper (a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to the present case, where the question is whether aluminium circles falling within the description of sub-item (b) of Item 27 would be liable to duty even though made from strips which had borne duty under the same item and sub-item. 29. Since the issue is covered by the decision of a Larger Bench of this Tribunal, there is hardly anything more which needs to be said. The Larger Bench in question, as seen from the opening para of Shri Raghavachari s order, was set up because of a conflict between earlier orders of the Tribunal. The decision of the Larger Bench would therefore be the last word on the question so far as the Tribunal is concerned. This is of course subject to the qualification that if there is a judgment of the Supreme Court or a High Court subsequent to the order of the larger Bench, and to a different effect, the decision of the Larger Bench might require re-examination. But that is not the case here. On the only point which is before me, namely, the aspect of double taxation, the learned advocate of the appellants had placed reliance on the judgment of the Hon ble Supreme Court in the case of Tata Iron Steel Co. Ltd. (A.I.R. 1976 S.C. 599). This was much bef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, and a minority opinion of Hon ble Judges. Nevertheless the reference was deemed to be answered according to the majority opinion. The proposed amendments to the Sea Customs Act (incorporated in the Customs Act, 1962) and the Central Excises and Salt Act were duly made and the relevant provisions are still very much on the statute book, without their constitutionality being challenged. The fact that the opinion of the Hon ble Supreme Court was on the basis of a bare majority of 5 to 4 did not in any way affect its sanctity. On the same principle, the fact that the Larger Bench decided by a majority of 3 to 2 does not take away the weight of the final decision as the decision of a Larger Bench. 31. A question might also be raised whether the decision of a Larger Bench should, necessarily be accepted and followed by another Bench. It is certainly open to a Bench, which considers that there are strong grounds for disagreement with the decision of another Bench of equal or greater strength, to suggest reference to a Larger Bench. This principle should not however be carried to the extent of suggesting review of the decision of a Larger Bench by a still larger bench. It is n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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