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2018 (7) TMI 846

eld that:- The first stage of the process of manufacture is a cleatting/riveting of the requisite number of stampings. Thus, the cleatting/riveting of the stake of stamping is a first stage necessary for the manufacture of stator. The show-cause notice alleges that the appellants have manufactured stators of different sizes. When the matter was remanded by the Tribunal, there was a specific issue referred to the adjudicating authority which required the adjudicating authority to determine if the process amounts to manufacture. - The impugned order deals with the classification of the product but it does not deal with the issue of manufacture. It needs to be appreciated that a different classification per se is not sufficient to prove t .....

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nt after cleatting or riveting them. The said cleatted or riveted stator stampings are sold by them for further use of manufacturing of electric motor. The issue in dispute is if the said cleatted or riveted stacks stampings are classifiable as part of stator falling under Heading 8503.00 of the First Schedule of the Central Excise Tariff Act, 1985 and duty can be demanded on the same. 3. Learned Counsel for the appellant contended that what they are selling are stampings only and the process of cleatting or riveting does not result in coming into existence of a part of stator or rotor. He elaborated the process of manufacturing of stator starting from the cleatting or riveting stampings as undertaken by the manufacturer of electric motors. .....

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riveting of stator stampings would not amount to manufacture. He argued that while the matter was remanded by the Tribunal to the adjudicating authority to decide on the issue of manufacture, the impugned order has not done the same. 3.3 He further argued that the process of cleatting or riveting of stampings does not amount to manufacture in terms of Section 2(f). He relied on the decision of the Hon'ble Apex Court in the case of Delhi Cloth Mills - 1977 (001) ELT 199. He submitted that mere change in form cannot be treated as manufacture. He argued that for the processing of manufacture, a new and different article must emerge having a distinct name, character or use. He argued that no new products comes into existence on account of c .....

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is an expert designer of motor and consultant. 3.4 He argued that since riveting or cleatting does not result in coming into existence of stator, therefore, the process does not amount to manufacture. He argued that Commissioner ignored this evidence and held the goods to be stator. He argued that Commissioner has erred in observing that the invoices described the product as "electric motor stampings" with different dimensions such as "106 x 57 75 mm stators". He argued that not a single invoice had described the goods as cleatted or riveted stator stampings in the form of stacks and therefore the appellants are not liable to pay duty. The Commissioner has wholly mis-interpreted the description of the goods given in the .....

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were marked with "loose" or "loose form". He argued that it was not claimed by them that at the time of clearance the word "loose" was put on those invoices. 3.7 He further argued that demand is barred by limitation since the appellants were under bona fide belief that the activities undertaken by them does not amount to manufacture. He further argued that quantum of demand is incorrect as the show-cause notice proposed to the items other than rotors as stators. He pointed out that if the demand is revised by limiting the value of "stator stampings in loose form" and "stator stampings cleared in loose" it would be substantially reduced. 4. Learned AR relied on the impugned order. He also rel .....

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slots and connected together by brazing. e) To remain the upper and down ends of coils stationery they are dipped in insulating varnish so as to get varnish cover. f) The end connections are brazed to the insulated lead wires." 5.2 The first stage of the process of manufacture is a cleatting/riveting of the requisite number of stampings. Thus, the cleatting/riveting of the stake of stamping is a first stage necessary for the manufacture of stator. The show-cause notice alleges that the appellants have manufactured stators of different sizes. When the matter was remanded by the Tribunal, there was a specific issue referred to the adjudicating authority which required the adjudicating authority to determine if the process amounts to manu .....

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he said issue, we set aside the impugned order and remand the matter to Commissioner for decision on the said issue. We make it clear that all other issues raised by the appellant, as regards the quantification of duty, limitation etc. are kept open for decision. The appeal is allowed in above terms. " 5.3 We find that the impugned order deals with the classification of the product but it does not deal with the issue of manufacture. It needs to be appreciated that a different classification per se is not sufficient to prove the fact of manufacture. To establish that the activity of manufacture is happened, it needs to be established that a new product known in the market has come into existence due to activity conducted by the appellan .....

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