9911796707
TMI Blog1985 (6) TMI 192X X X X Extracts X X X X X X X X Extracts X X X X ..... -C.E. Later on they filed two refund claims for ₹ 71,469.52 and ₹ 12,915.12 on the grounds that they wrongly paid duty on recoating of rolls and re-rubber lining of tanks and vessels. According to them, recoating or re-rubber lining is a process of re-conditioning of used rolls and does not involve any manufacturing activity. Grinding and polishing is done just to smoothen the surface of rubber. 2. The Assistant Collector of Central Excise, Division I, Ahmedabad, however, did not accept this contention of the respondents and rejected both the refund claims filed by the respondents vide two separate orders being Order-in-Original No. 136/81, dated 26-8-1981 and 106/81, dated 29-6-1981 by observing as under : "A scrutiny of the Invoices submitted with refund claim show that the duty has been paid on the process of recoating of rolls, with rubber compound. The-rubber compound as per specifications required is prepared by this manufacturer. The rubber compound is rolled on the rolls after removing the earlier coat remnant. This rolled rubber on the rolls is strapped with canvas ribbon and placed for vulcanization at desired temperature. After vulcanization the proces ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refund claim prior to the period 3-4-1980 is barred by time. 5. Not satisfied with the said order passed by the Collector (Appeals), Bombay, the Government of India in exercise of the powers vested in it under Section 36(2) of the Central Excises and Salt Act, 1944, issued a show cause notice asking the respondents M/s. Lathia Industrial Supplies Co. Pvt. Ltd. as to why the order passed by the Collector of Central Excise (Appeals) should not be set aside as it was not propers, legal and correct. The reasons given are as under : "It appears to the Government that the process of coating/lining of rubber layers after grinding and polishing which involves a series of operations would be a process of manufacture resulting in the production of new goods. It appears to the Government that there is no material difference between the process of coating/lining with rubber in the case of new rollers and that in the case of an old roller, because both involve the process of grinding, polishing, and rubber lining/coating." 6. These proceedings which were pending before the Govt. of India, now stand transferred to this Tribunal under section 35P(2) of the Central Excises and Salt A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tant product was manufactured. Merely because some processes were applied 'and some changes were brought about on the original material, it cannot be said that the manufactured product is liable to excise duty. Recoating and re-lining work done by the respondents amounts to repair/recoating and that whatever processes are adopted by the respondents do not amount to manufacture of a new excisable article. There is no transformation under a distinct character or use. The goods remain the same and have the same characteristics as before. Galvanising is nothing but the iron sheet article is coated with zinc to prevent its oxidisation and improve its utility and does not constitute manufacture. Subsequent processing of goods does not amount to manufacture of excisable goods as they were originally manufactured except that they were processed. In a case reported in 1979 E.L.T. J 593, it was held that retreating of tyres was not excisable. In another case reported in 1977 E.L.T. J 67, it was held that mere application of gum on one side paper does not convert the paper into a new commodity. He also drew our attention to another case wherein it was held that dipping stainless steel scraps ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of rubber rolls no new article emerges out and it continues to be the same. According to the learned counsel when the roll is sent for recoating or reconditioning it goes as rubber roll and it remain as rubber roll. Manufacture must bring into existence an entirely new article. The article should be new and different article and it must emerge having a distinctive name, character or use. In the case of rubber rolls received for recoating neither new article comes out nor any different article emerges out as in the case of tyres which remains as tyres. It comes as tyres and it goes as tyres even after retreating. Similarly, in the case of worn out shoes, when the shoes are repaired, it goes as shoes only. According to him, reconditioning of bolts, reconditioning of metal containers and roller bearings are not considered under the purview of Excise Act as manufacturing. The Collector (Appeals) has correctly appreciated the facts and law while holding that recoating or re-rubberlining, does not bring into existence goods of different taxable description and as such it would not amount to manufacture and no duty is payable for the same. The review show cause notice is based o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nufacture of Rubber Rollers. Without coating of rubber on blank roller, it cannot be used as a rubber roller nor we can call a blank roller as a Rubber Roller. Both these products are distinct and different articles. The process of rubber coating on metal roller cannot be said to be repairing of the old rolled as is evident from Annexure 'B' which describes the process, which is the same the process of rubber coating on blank roller. Even otherwise, in the case of P.C. Cheriyan v. Mst. Barfi Devi (1979 E,L.T. J593) the Hon'ble Supreme Court observed in para 11 at page 596 that in the Excise Act, the term 'manufacture' has been given an extended meaning by including in it 'repairs' also. 'Manufacture' in: the Notification has to be interpreted on the basis of its definition in the parent statute. It includes any process incidental or ancillary to the completion of a manufactured product. Whether a 'process' is a manufacturing process or not, the Hon'ble Supreme Court laid down that the broad test for determining is whether it brings out a complete transformation for the old components so as to produce a commercially different article or commodity. The essence of manufacture is chang ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cture' as laid down in section 2(f) of the Central Excises and Salt Act, 1944. The various decisions cited by the learned counsel for the respondents that reconditioning, remaking, reprocessing does not amount to manufacture are not applicable in the present case. As has been observed by us, coating of rubber compound on metal roller brings into existence a new and distinct commodity known as Rubber Roller. It is not a case of reconditioning, repairing, remaking and reprocessing. The decision given by the Special Bench 'B' of this Tribunal in the case of Saran Engineering Co. Ltd., Bihar v. C.C.E. reported as 1984 (4) E.T.R. 382 also does not help the respondents in establishing that this process does not amount to 'manufacture'. In that case the Bench after considering the decisions of the Hon'ble Supreme Court in the case of South Bihar Sugar Mills-1978 E.L.T. (J336) (SC) = (1968 SCR 21) and Union of India v. D.C.M. 1977 E.L.T. (J199) (SC) = (AIR 1963 SC 79) and also considering the decision of P:C. Cheriyan v. Mst. Barfi Devi (supra) found that reshelling of roller shafts does not amount to "manufacture'. In that case, roller .shafts consisted of a heavy forged steel shaft with ..... X X X X Extracts X X X X X X X X Extracts X X X X
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