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2016 (7) TMI 771 - CESTAT HYDERABAD

2016 (7) TMI 771 - CESTAT HYDERABAD - TMI - Manufacture - Demand of differential duty - appellants have taken CENVAT credit on the bars/strips and paid duty on the said final products @16% ad valorem till 28-02-2004 and @ 8% ad valorem from 01-03-2004 to 30-06-2004. However they stopped paying duty from July 2004 onwards and sought to classify the said final products under CETH 7206.90 of the Tariff on the contention that the processes carried out by them do not amount to manufacture. The depart .....

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o new manufacturing process involved. - Demand set aside. - E/992/2006 - Final Order No. A/30514/2016 - Dated:- 21-6-2016 - Ms. Sulekha Beevi, C.S., Member (Judicial) and Shri Madhu Mohan Damodhar, Member (Technical) Shri M. Narayana Swamy Naidu Advocate for the appellant. Shri R.R. Bangar, Addl. Commissioner (AR) for the respondent. ORDER The facts of the case are that the appellant were engaged in the manufacture of M S Structures and Parts of Structures falling under Chapter sub-headings 7308 .....

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n CENVAT credit on the bars/strips and paid duty on the said final products @16% ad valorem till 28-02-2004 and @ 8% ad valorem from 01-03-2004 to 30-06-2004. However they stopped paying duty from July 2004 onwards and sought to classify the said final products under CETH 7206.90 of the Tariff on the contention that the processes carried out by them do not amount to manufacture. The department however entertained the view that the said final products correctly fall under Chapter heading 7308 of .....

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he appellant was represented by Shri M Narayana Swamy Naidu, Advocate. The main submissions of the appellant can be summarised as follows: i. The appellants obtained Central Excise Registration Certificate No.2/97 of Tirupati-l Range of Tirupati Division, with intention of manufacturing MS Bars / Ribbed Steel Strips, galvanisation etc. but they could not manufacture the said goods, as they could not install the required machinery for this purpose. They were doing galvanising work on the goods of .....

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hat even if they purchase duty paid goods under valid invoices from other manufacturers and galvanise them, it amounts to manufacture. Therefore they took CENVAT credit of the duty paid by them on the MS Bars / Strips and after galvanisation cleared the same on payment of Central Excise duty. ii. During the period from 01/01/2004 to 28/02/2004, they cleared the goods on payment of duty at 16% ad valorem. From 01/03/2004 to 30/06/2004, they paid duty at 8% ad valorem, availing the concessional ra .....

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of iron or non-alloy steel are classifiable under Chapter 7214 and HA steel strips are classifiable under Chapter 7211 . iv. They were subjected to the processes of cutting, drilling/punching holes and galvanisation. These processes did not amount to manufacture. Several judicial decisions in support of the said ground have been cited in the grounds of appeal and written submissions dated 16/05/2016. Consequently the said MS bars and HA steel ribbed strips continue to be classifiable under 7214 .....

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entral Excise Tariff schedule has come into force.) vi. As the processes to which the impugned goods were subjected to, did not amount to manufacture, no fresh liability of Central Excise duty had arisen. But the appellants have erroneously been paying Central Excise duty at 16% till 29/02/2004. As the rate of duty was reduced to 8% w.e.f. 01/03/2004 as per Notification No. 16/2004-CE dt. 28/02/2004, the appellants have paid Central Excise duty for the impugned goods at 8% amounting to R. 13,62, .....

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law of limitation as longer period of limitation is not invocable. The learned Commissioner did not give any finding on this plea urged by the appellants. 4. Revenue, represented by Shri R.R. Bangar, reiterated the findings of the Order-in-Original and contended that that the processes carried out would bring the final products under Chapter 73 . He also contended that as per Chapter Note to Chapter 72 the process of galvanising is deemed process of manufacture and for these reasons the impugned .....

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a decision of Larger Bench 2005(190) ELT 301 (Tri-LB) held such processes do not amount to manufacture. The relevant part of the decision is extracted below: 3. … … … Further the learned advocate stated that even after the decision of the Larger Bench o CESTAT in the case of Mahindra & Mahindra Ltd. Vs. CCE, Aurangabad, Chandigarh, Kanpur and Chennai, there is no change in the position. He invited our attention to the relevant paragraph in the above decision which is rep .....

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punched and screws fitted. Unlike in liquid mixtures, the raw material of iron and steel or wood will retain their identity, but it is precisely their being cut and designed, punched and fitted to make an article commercially known that involves manufacture of an article distinct from angles, sheets, tubes etc. used in it. Mere drilling holes or mere cutting jobs in isolation may not by themselves involve manufacture of an article, but converting raw material like angles, tubes, plates etc. to .....

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