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TMI Blog2010 (2) TMI 412X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of pipe/tube of oxygen lancing pipe amounts to 'manufacture' within the meaning of Section 2 (f) of the Central Excise Act, 1944? 2. The appellant is engaged in the process of threading and affixing of socket at the end of pipes and tubes. The Appellant is also carrying out process of cold drawing and re-drawing the pipes and tubes. The Appellant is selling these pipes to Industrial Units for carrying oxygen in the process of cutting heavy sections of steel. The process of cutting heavy sections of steel is commonly called as lancing. Therefore, the pipes used for this purpose are called Oxygen Lancing Pipes. In other words, the appellant is converting normal pipes and tubes into Oxygen Lancing Pipes. 3. The appellant on 17.03.1994 wrote a letter to the Deputy Collector of Excise, Faridabad seeking clarification with regard to the levy of duty on lancing pipes manufactured by them. The Appellant in the said letter disclosed the process carried out by them. 4. The Deputy Collector vide its letter dated 24.09.1994 informed the Appellant that process carried out by them amounts to manufacture as per Section 2 (f) of the Central Excise Act, 1944. 5. The Respondent Departmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed or paid or which has been short-levied or short-paid or to whom the refund has erroneously been made, requiring him to show cause why he should not pay the amount specified in the notice: Provided that where any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded by reason of fraud, collusion or any willful mis-statement or suppression of [acts or contravention of any of the provisions of this Act or of the rules made thereunder with an intent to evade payment of duty, by such person or his agent, the provisions of this sub-section shall have effect [as if, ["""]] for the words [one year], the words "five years" were substituted. Explanation. - Where the service of the notice is stayed by an order of a Court, the period of such stay shall be excluded in computing the aforesaid period of (one year) or five years, as the case may be." 7. As per above quoted Section the demand can be normally raised for the period of six months but in case fraud, collusion, mis-statement of facts or contravention of the provisions of the Act with intent to evade payment of duty, demand can be raised for a period of five years. The extended ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es into oxygen lancing pipes would amount to "manufacture" as the final product has a distinctive name, character and use. 5. Trade and field formations may be informed accordingly. 9. From the letter dated 02.01.1995 written by Assistant Collector (Technical) and Board Circular dated 27.03.2006, it appears that there was certainly doubt about the levy of duty on lancing pipes. As there was doubt about the duty liability, it cannot be concluded that there was fraud or suppression of facts or willful mis-statement by Appellant for invoking the extended period of limitation. Even it is not the case of the Respondent that Appellant did not pay duty on account of fraud, suppression of facts or willful mis-statement of facts. The Hon'ble Supreme Court in the case of Padmini Product (supra) as pointed out by the Ld. Counsel for the Appellant in para 8 has held as under: "8. Shri V. Lakshmikumaran, Learned Counsel for the appellant drew our attention to the observations of this Court in Collector of Central Excise, Hyderabad v. M/s Chemphar Drugs and Liniments, Hyderabad 1989 (40) E.L.T 276 (S.C.) = 1989 (2) SCC 127 where at page 131 of the report, this Court observed that in order t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was required because the whole duty was exempt in view of Notification No. 111/78, referred to hereinbefore, and in view of the fact that there was scope for believing that it was exempt under Schedule annexed to the first notification, i.e., 55/75, being handicrafts, the appellants could not be held to be guilty of the fact that excise duty had not been paid or short-levied or short-paid or erroneously refunded because of either any fraud or collusion or willful misstatement or suppression of facts or contravention of any provision of the Act or Rules made there under. These ingredients postulate a positive act. Failure to pay duty or take out a licence is not necessarily due to fraud or collusion or willful mis-statement or suppression of facts or contravention of any provision of the Act. Suppression of facts is not failure to disclose the legal consequences of a certain provision. Shri Ganguly, appearing for the revenue, contended before us that the appellants should have taken out a licence under rule 174 of the said Rules because all the goods were not handicrafts and as such were not exempted under Notification No. 55/75 and therefore, the appellants were obliged to take out ..... X X X X Extracts X X X X X X X X Extracts X X X X
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