TMI Blog1990 (10) TMI 181X X X X Extracts X X X X X X X X Extracts X X X X ..... xcises licence and they paid duty on their products under protest under Tariff Item - 68. But immediately after due consideration, it was decided that the appellants were not liable to pay duty and a refund of Rs. 30,212/- was given to them. 3. On introduction of the new Excise Tariff with effect from 01-03-1986, the appellants were advised by their Consultant that their products fall under Chapter-39, sub-heading 3922 and they would be exempted under the Notification No. 132/86 dated 01-03-1986. But, however, the department issued a Show-Cause-Notice dated 29-01-1987, contending that the articles of plastic manufactured by them attracted Chapters 84 to 92, 95 and 96 of the Tariff. With regard to the plastic articles made for Mixies and Grinders, the appellants contend that the Show-Cause-Notice had sought to classify them under Heading 8509.00 which is for Electro-Mechanical Domestic Appliances with Self-Contained Electric Motors, and their description was not applicable to the plastic articles made by the appellants. They were supplying articles to their customers in unfinished state which required further processes - like Drilling, Cable entry making and Cords connection and o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. The appellants had sought clarification from their Consultant about the excisability of their products and only after obtaining an opinion that they were not to pay any duty that they remained without paying duty and no evasion was contemplated. In support of his arguments he referred to the following case laws: (i) 1989 (40) E.L.T. 276 (S.C.) - Collector of Central Excise v. M/s. Chemphar Drugs Liniments; (ii) 1989 (39) E.L.T. 414 (Tribunal) M/s. Electronics Corporation of India Ltd. v. Collector of Central Excise; (iii) 1988 (36) E.L.T. 706 (Tribunal) - C.C.E. v. M/s. Naz Enterprises. 6. The Ld. J.D.R. Shri M.S. Arora in his rejoinder, stated that the goods were parts, such as for Wet Grinders and the Annexures attached to the Show-Cause-Notice would indicate that these were sold to different units and have a ready market. In their reply to Show-Cause-Notice issued by the department dated 12-03-1987, they have referred to goods being purchased by various companies. He referred to the case law -1985 (21) E.L.T. 3 (S.C.) - Indian Aluminium Cable Ltd. v. U.O.I and Others. He reiterated the Collector s orders with regard to the Section Notes in applying the same to par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e being finished. In the present case, the products are found to be identifiable parts of goods and have been purchased by the customers for further manufacture of products. The case law in Union of India and Others v. Delhi Cloth and General Mills Co. Ltd. and Others -1977 (1) E.L.T. (J-199) (SC) has been referred to by the appellants, which according to the ratio is that :- The word manufacture is generally understood to mean as bringing into existence a new substance and does not mean merely to produce some change in a substance , therefore Manufacture implies a change but every change is not manufacture. But something more is necessary and there must be transformation, a new and different article must emerge having a distinctive name, character or use. 8. To see whether there has been any transformation and a new and different article has emerged, the parts of mixies, grinders have acquired a shape and distinct article has emerged, with a market as being a part of the above mentioned products which are bought by the manufacturers for fitment to the articles manufactured by them. Therefore, the case laws quoted do not seem to be applicable and the products manufactu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... department was fully aware of the manufacturing activity and had also given them a refund of Rs. 30,212/- for the period 22nd April, 1982 to 30th April, 1982 on the ground that no duty was payable as articles of plastic and were exempted. But the position is with effect from 01-03-1986, with the introduction of the new Schedule of Tariff, they have not discharged their obligation to get their products properly classified and pay the duty due. The state that they referred to their Excise Consultant on or around March 18, 1986, who advised them that no duty is payable, but it is not the Consultant who is the authority to finalise the matter, as the appellants should have obtained a confirmation from the department. The knowledge of manufacturing activity four years prior to the introduction of the new Tariff cannot absolve them of their responsibility of discharging their duty liability. It is a failure on the part of the appellants. The Hon ble Supreme Court has held in the case of C.C.E. v. Chemphar Drugs Liniments reported in 1989 (40) E.L.T. 276(SC): Demand - Limitation - Extended period of five years applicable only when something positive other than mere inaction or failu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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