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TMI Blog2018 (6) TMI 434X X X X Extracts X X X X X X X X Extracts X X X X ..... awing or redrawing a rod, wire or any other similar article, into wire shall amount to 'manufacture'". "2. In relation to the products of heading No.74.11, the process of drawing or redrawing shall amount to 'manufacture'." The department also alleged that the appellants have underdeclared the cost of raw material and also suppressed production to remain within the full exemption limit of Rs. 1 crore. Accordingly, show cause notice was issued demanding duty on the processes done by the appellant and denying the small scale exemption claimed by the appellant. The small scale exemption was also denied on the ground that the appellant had failed to file declaration as required in terms of Notification No.361/2001-CE(NT) dated 26.6.2001. 2. Learned counsel for the appellant argued that the process allegedly undertaken by them would amount to manufacture only if the final product made by them is a "wire". He relied on the definition of wire as specified in Note 1(o) of the Chapter 72 which is reproduced as below:- "Cold-formed products in coils, of any uniform solid cross-section along their whole length, which do not conform to the definition of the flat-rolled products." ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... equirement and non-observation of such procedural requirement should not come in way of grant of the benefit of notification. He relied on the following decisions to support his argument:- (i) HMM Ltd. vs. CCE - 1996 (87) ELT 593 (SC); (ii) Mangalore Chemicals & Fertilizers vs. DC - 1991 (55) ELT 437 (SC). 4. He argued that the allegations of clandestine removal are based on the statements of transporters and LR copies recovered from the transporters. The said documents have not been corroborated by any statement of the appellant or on the records of the appellant. He argued that such evidence is a third party evidence and cannot be used to support the allegations of clandestine removal without any corroboration from the appellant or their records. He relied on the following decisions to support his assertion:- (i) CCE vs. Rajaguru Spinning Mills - 2009 (243) ELT 280 (T); (ii) Senthil Kumar Soaps Works vs. CCE - 1997 (89) ELT 77 (T); (iii) Sharma Chemicals vs. CCE - 2001 (130) ELT 271 (T). He argued that the charge of clandestine removal should be supported by tangible evidence and the evidence in the present circumstances is unverifiable and unreliable, especially ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Steel Co. Ltd. vs. UOI - 1988 (35) ELT 605 (SC). He further argued that under these circumstances, no penalty or redemption fine can be imposed. 6. Learned departmental representative relied on the impugned order. He argued that the value of goods was grossly misdeclared in the delivery challans seized under panchnama dated 14.9.2006 for the years 2003- 04 to 2006-07. He argued that the gross turnover was grossly underdeclared. It was alleged that one of the raw material supplier M/s. Vimal Metal Corporation had purchased SS wire rods from M/s. D.H. Exports, Navi Mumbai @ Rs. 125/- to 110/- per kg. depending on the quality whereas the value shown on delivery challan was Rs. 36/- per kg. He pointed out that job work charges varied from Rs. 8/- per kg. to Rs. 20/- per kg. depending on the quality. He pointed out that in the statement of Shri Bhawarlal S. Jain, partner of M/s. Sandeep Metal India, has admitted that he was giving material for job work for redrawing of SS wire from SS wire rods and the normal charges were from Rs. 5/- per kg. to Rs. 8/- per kg. He also admitted that the arrangement for the delivery of the goods is made by private tempo or lorry for which transportat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to wire shall amount to 'manufacture'". "2. In relation to the products of heading No.74.11, the process of drawing or redrawing shall amount to 'manufacture'." It is seen that to qualify as manufacturer in terms of section note, the final product in the shape of wire has to come into existence. In respect of goods of Chapter 74 and in terms of Chapter Note 2 to Chapter 74, the process of drawing or redrawing itself amount to manufacture. The appellant has asserted that the Revenue has failed to produce any evidence that the product manufactured by them was wires in so much as evidence of clearance of the goods in coil form has been produced. They relied on the definition of wire as follows: "Cold-formed products in coils, of any uniform solid cross-section along their whole length, which do not conform to the definition of the flat-rolled products." It is seen from the impugned order that the appellant had five redrawing machine, one weighing machine of small capacity, grinding machines, one lathe machine, small cutting machine and three drums for pickling. The appellant has claimed that they had no coiling machine and thus question of making coils does not arise.We find ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CEGAT endorsed the view that the exemption from operation of Rule 174, was not available to the appellants. On the facts found, the view is on terra firma. We find no merit in this appeal, which is, accordingly, dismissed." It is seen that in case of Notification No.8/2003, the filing of declaration is not a mandatory pre-requisite and is more of a procedural nature. Thus it is held that the benefit of small scale notification cannot be denied merely for the failure of the appellant to file the said declaration. 10. The next issue relates to the validity of the LRs recovered from various transporters as evidence against the appellant. It is seen that the addresses appearing in LR could not be verified as some of the addresses were non-existent or bogus. It is seen that the LRs were recovered from the premises of the transporter. The transporter had stated that the goods were transported from the premises of the appellant to their godown at Masjid Bunder. The consignees would approach their godown with one copy of LR and take possession of the goods from the godown. The transportation charges for such goods were also paid by the consignees receiving the goods on the strength of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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