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M/s. Ess Ess Metals & Electricals Versus CCE, Delhi-II

2017 (6) TMI 373 - CESTAT NEW DELHI

Manufacture - whether conversion of nonferrous metals into metal alloys would amount to manufacture in terms of the section 2(f) of the CEA 1944? - whether the goods viz. Nickel, lead and tin alloys made by the appellant were liable to Central excise duty during the disputed period? - Held that: - similar question came up before the Hon’ble Supreme Court in the case of Commissioner Central Excise Jaipur vs Mahavir Aluminum Ltd [2007 (5) TMI 2 - SUPREME COURT OF INDIA] in which the Apex Court con .....

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- Matter remanded to the original adjudicating authority who will recompute the demand after excluding the demands attributable to the documents whose copies have not been made available to the appellant - Appeal allowed by way of remand. - E/1577/2007-EX[DB] - A/53700/2017-EX[DB] - Dated:- 7-6-2017 - Dr. Satish Chandra, President And Mr. V. Padmanabhan, Technical Member Shri Bipin Garg, Advocate the appellant Shri M.R. Sharma, DR for the respondent ORDER Per: V. Padmanabhan This appeal is aga .....

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or confiscation of land, building, plant and machinery used in the manufacture of excisable goods. The appellant was not discharging the Central excise duty payable on the goods viz. alloys of various nonferrous metals, by taking the view that these metals as well as metal alloys remained classified in the same tariff heading up to 13.5.1988, and hence, there can be no manufacture in the conversion of metal into metal alloys. Revenue was of the view that conversion of nonferrous metals into meta .....

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de the Tribunal s order dated 04.05.2001, the case was remanded back to the adjudicating authority for passing de novo orders after extending an opportunity to the appellant. The impugned order dated 09.03.2007 stands passed by the Commissioner in the de novo proceedings in which the duty demand as proposed in the show cause notice stands confirmed along with penalty of ₹ 50 lakh under rule 173Q. Aggrieved by this order the present appeal has been filed mainly agitating the following groun .....

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has been issued, has not been supplied to them. Consequently the demand raised, on the basis of such documents, cannot be sustained. iv) The appellant had sought cross-examination of the investigating officers which has not been permitted by the adjudicating authority. v) If the process undertaken by the appellant amounts to manufacture, they will be entitled to the benefit of small-scale industry exemption notification number 175/86 dated 01.03.1986 since they were registered with the Director .....

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sputed period. The defense raised by the appellant is that till 12.5.1998, both metals and its alloys were classifiable under the same subheading and after 13.5.1998, the Central Excise Tariff stands fully aligned with HSN. Consequently, metal alloys cannot be considered as a manufactured product since they remain classified in the same heading as the metals. 5. A similar question came up before the Hon ble Supreme Court in the case of Commissioner Central Excise Jaipur Vs Mahavir Aluminum Ltd r .....

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t the process carried out by the assessee of Melting Ingots into Round Ingots for the purpose of extrusion did not amount to manufacture and the taxable commodity remained the same although in different form. CEGAT stated that mere change in physical form of shape or substance does not amount to manufacture . It, therefore, allowed the appeal and set aside the order passed by the Commissioner. The said order is challenged by the Revenue in this Court. 10. We have heard the learned counsel for th .....

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so known as Round Ingots or Billets are only a different form of the same taxable commodity, namely, Wrought Aluminium under Chapter 7601. The process or conversion of Melting Ingots into Extrusion Ingots was not a process of manufacture and there is a change in shape or form of the product. The order of CEGAT, hence, calls for no interference. 13. Having heard the learned counsel for the parties, in our opinion, the appeal deserves to be allowed. The expression manufacture is defined in Clause .....

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e, goods, but also any person who engages in their production or manufacture on his own account. 14. It is thus clear that manufacture includes any process under Section 2(f). As observed by this Court before more than four decades in Union of India & Another v. Delhi Cloth & General Mills Co. Ltd. & Ors., (1963) Supp (1) SCR 586 : AIR 1963 SC 791, the word manufacture is a verb which is generally understood to mean as bringing into existence a new substance and does not mean merely .....

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16. In Union Carbide India Ltd. v. Union of India & Ors., (1986) 2 SCC 547, this Court held that in order to attract Excise Duty, the article manufactured must be capable of sale to a consumer. To become goods, an article must be something which can ordinarily come to the market to be bought and be sold. 17. In Union of India & Ors. v. J.G. Glass Industries Ltd. & Ors., (1998) 2 SCC 32, leading decisions came to be considered by this court and it was held that a two fold test emerged .....

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rocess. In other words whether the commodity is already in existence will be of no commercial use but for the said process . 19. In the present case, the assessee is not only captively consuming Aluminium Billets for the production of Irrigation Pipes but is also selling such commodity in open market. It is, therefore, clear that the process of manufacture results in emergence of new commercial commodity, namely, Billets . The said commodity has an independent marketability and the assessee itse .....

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are, therefore, of the view that the Commissioner was right in holding that the assessee was liable to pay Excise Duty and CEGAT was wrong in interfering with the order-in-original. The order of the CEGAT, therefore, is liable to be set aside. 22. For the foregoing reasons, the appeal deserves to be allowed and is accordingly allowed. The order passed by CEGAT is set aside and the order-in-original passed by the Commissioner is restored. 23. The learned counsel for the assessee, however, submitt .....

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l into alloys does not amount to manufacture. Ipso facto Central Excise duty is liable to be paid on the finished product cleared from the appellant s factory. 7. Now we turn to the various pleas raised by the appellant during the course of argument of the present appeal. It has been argued that all the relied upon documents based on which the show cause notice has been issued, has not been supplied to the appellant. It has also been submitted that if duty is held to be payable by the appellant, .....

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