TMI Blog1991 (5) TMI 177X X X X Extracts X X X X X X X X Extracts X X X X ..... bunal in the latter s favour by Order No. E/272/90-D dated 12th April, 1990. We observe that the Tribunal had decided that appeal in the following words :- 4. We have carefully considered the submissions made by the learned DR and the learned consultant. The Collector (Appeals) in his order has found that the respondents herein are taking used and duty-paid tea chests from which lid is removed, repair the damages and in very rare case, put some new plywood and re-assemble the chests and that what is given to them for making the original tea chests and what is obtained by the process is tea chests. The Collector (Appeals) in this situation found that no new product can be said to have emerged and hence there was no warrant to hold that a process of manufacture had taken place. Ac cording to him, it is only a process of repair or reconditioning. The department, however, holds that it was not a case of repair, but the manufacture of tea boxes commercially known differently from tea chests which are dismantled and used as raw material. Examining these contentions, we find that the original tea chests material, namely, the plywood, after dismantling is again used in the manufacture o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion if they continue to be goods of the same species. In that case, the Supreme Court held that pipe fittings made out of pipe and tubes continue to be pipe and tubes. In this view of the matter, we see no reason to interfere with the order passed by the Collector (Appeals). The appeal is rejected." 3. During his arguments, the learned Departmental Representative, Shri L. C. Chakravarti, distinguished this decision by placing reliance on paras 7 and 8 of the order of the Assistant Collector, Central Excise, Nagpur which are as under :- 7. In this case I observe that M/s. Brooke Bond are supplying the raw material such as (i) Plywood panels/planks (ii) Battons (iii) Nails (iv) Strips of tin (v) Paints and Colours etc. to the job-workers viz., (i) M/s. Kanpur Saw Mills (ii) M/s. Soniya Packing Co. and (iii) M/s, M. P. Timber Works all of Kanhan. None of these job workers independently manufacture and sell the so-called plywood tea-chests or boxes as such. Their profession in the main is of Saw mill. None of these job workers have any interest in the manufacture of these tea-chests" except for this assessee. In this connection, I may usefully refer to Hon ble Supreme Court s de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) No written contracts embodying their formal terms and conditions were or are entered into by the said independent Parties/Contractors. However, from facts which are admitted and about which there are and can be no disputes whatsoever, it will be seen that the above mentioned process of dismantling, re-assembling, and/or re-structuring and/or repairing, is carried out by the said outside Parties, from time to time, for job charges had and received by the said outside Parties/Contractors. In the circumstances, in respect of the above mentioned work, from time to time the appellant issues Work orders and the said independent parties, raise their bill in consideration thereof and they are paid on terms and conditions contained therein. At all material times, the said independent parties were and are independent individuals and/or Contractors, and the dealings by and between the Appellant and the said independent parties and/or contractors were and are on a Principal to Principal basis. In connection with the above mentioned averment, a specimen copy of a work order issued by the applicant, and the Bill raised by the said outside parties, and/or contractors connection therewith is ann ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ility to duty a second time. 9. As far as appeal No. 2306/88D is concerned, Shri Khaitan submitted that the Collector had confirmed the demand of Rs. 18,77,365.38 for the period 1-8-1977 to 30-6-1982 under Rule 9(2) read with Section 11A and had imposed a penalty of Rs. one lakh under Rule 173Q on the ground that the allegation of mis-statement or suppression of facts made in the show cause notice dated 11-8-1982 had been established. He contested the findings of the Collector which, according to him, were based only on a bald statement about mis-statement and suppression in the show cause notice without citing any supporting evidence. Shri Khaitan contended that even assuming that the process of reassembly amounted to manufacture , the conduct of the appellant company could not be considered to be malafide warranting imposition of penalty. He submitted that the activity of re-assembly of tea chests was not done clandestinely and hence the extended time limit of 5 years for confirming the demand could not be invoked. He placed reliance on the judgment of the Tribunal in the case of Vasant Sahakari Sakhar Karkhana Ltd. v. Collector of Central Excise [1989 (43) E.L.T. 98 Trib.] in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve themselves been undertaking the work of dismantling of the used tea-chests and have thereafter been supplying plywood panels, nails, tin strips etc., to their job workers (who in his view, are the contractors of the appellants), and the latter have been putting together tea-chests and supplying them to M/s. Brooke Bond, there is a transformation of the raw materials into a new article and this, in terms of the law as propounded by the Supreme Court, amounts to manufacture of a new and identifiable article. Shri Khaitan has, on the other hand, countered this argument by saying that, if the dismantling as well as the putting together of the plywood panels was done within the appellants company s own premises would it, by the same logic, not amount to manufacture? Can it, therefore, be said that the question rests on whether one party does it or more that one does it? The fallacy in the argument is too obvious to need any explanation. The Supreme Court has held that manufacturing is a process wherein a distinctly different commercial commodity, with a different identity and name should emerge. 13. If this principle is applied to the present case, it cannot be said that by dismant ..... X X X X Extracts X X X X X X X X Extracts X X X X
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