TMI Blog1987 (6) TMI 150X X X X Extracts X X X X X X X X Extracts X X X X ..... e.f. 1-1-1982. The duty in respect of this item for the period 7-7-1980 to 31-10-1980 is pending appeal. 3. In their Lower Parel factory, the appellants are manufacturing Iron Castings and are supplying the castings without any machining. But the defective castings manufactured at Kurla Andheri factory as well as the Lower Parel factory and also castings supplied by the customers are machined at the Parel factory. These machined and unmachined castings are intended for use as automobile parts after further process and cannot be used for any other purposes. The TI 68 came into force on 1-7-1975. The appellants sought a clarification and they were informed by the Superintendent vide letter dated 3-3-1975 that the castings remained classified under TI 25. On 7-3-1975, they received a letter from the Superintendent, informing them that as they have got machining facility and the iron castings are converted into machine parts, they would attract duty under TI 68. The appellants contended that the machining operations did not change the form of the castings except that bore or holes were drilled and the surface made even by milling operation. No new product was manufactured by such typ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... High Court repelled the contention that the steel castings after their cleaning/machining/ polishing were again liable to duty under TI 68. In 1983 E.L.T. 1113 (TISCO Ltd., Jamshedpur v. Collector of Customs, Calcutta), the Tribunal held that when machining and polishing the castings did not change their basic character as castings and thus machining and polishing steel castings would still fall under TI 26AA and not under TI 68. The learned Counsel sought to distinguish in 1985 (20) E.L.T. 280 (Delhi) (Metal Forgings Pvt. Ltd. and Another v. Union of India and Others), where the Delhi High Court has held that when forged products were machined/drilled/polished, they assumed altogether different character from what it was when forged. If they are identifiable and useable as machine parts without any further process, they became liable to duty under TI 68. He stated that an appeal has been admitted before the Division Bench and stay has been ordered. 8. The Ld. Counsel then urged that even if Item 68 apply to the facts of the case, the benefit of Notification 89/79 dated 1-3-1979 and Notification 105/80 dated 19-6-1980 would apply. The Lower Authorities have computed the value ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... distinct article despite some negligible deficiency, the goods could be said to have gone out of the purview of TI 25. In 1985 (19) E.L.T. 103 (Tribunal) (M/s Pefco Foundry . Chemicals Ltd. v. C.C.E., Pune). The Tribunal having regard to the product involved therein held that they had become a different article falling under TI 68 of the Tariff. In 1985 (22) E.L.T. 487 (Tribunal) (M/s SAIL, Durgapur v. C.C.E., West Bengal, Calcutta), the Tribunal held that whenever forged products of iron and steel had transformed by a further process of manufacturing as parts of machinery, they become liable to additional duty of Central Excise under TI 68 in addition to the duty at the stage of forging. This decision follows the decision of the Delhi High Court in the case of Metal Forgings (cited supra). 13. Sh. H.L. Verma, SDR then urged that the factory at Kurla Andheri cannot be considered as a separate unit. The benefit of notification 89/79 will not apply. 14. Regarding the discount, it was urged on behalf of the Revenue that Invoice Price was influenced by other considerations and hence a higher discount was given to the agents. The SDR submitted that the authorities below have c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ew the observations of the Assessing Authority has to be accepted in view of the processes involved and the change or transformation in the nature of the product. In 1985 (20) E.L.T. 280 (cited supra), a Single Judge of the Delhi High Court had an occasion to examine the detailed classification of forged product of iron steel. In paragraph 15, it is observed It is, therefore, for the Central Excise authorities to determine as to which of the forged products of iron steel manufactured by the petitioner are transformed by a further process of manufacture as parts of machinery which are liable to additional duty of Central Excise under T.I. 68 in addition to the duty at the stage of forging. Having regard to the nature of the operations and impact of those operations on the castings, we are of view that the products question were rightly assessed to duty under TI 68. 17. The appellants urged that, in any event, they would be entitled to the benefit of Notification 89/79 and 105/80. The relief in respect of these notifications was denied by the Authorities below on the basis that the total value of the Plant Machinery of the factories as a whole exceeded Rs. 10 lacs and Rs. 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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