TMI Blog2003 (3) TMI 170X X X X Extracts X X X X X X X X Extracts X X X X ..... lty of Rs. 10 lakhs payable with interest @ 20% against the firm, appellant No. 1, and also imposed penalty of Rs. 3 lakhs each on the other appellants. 2.The facts giving rise to these appeals may briefly be stated as under - The firm, M/s. Sanjay Industrial Corporation, appellant No. 1, is a Proprietorship concern of Shri Sanjay R. Mehta (appellant No. 2). The appellant No. 3, Shri Suresh R. Mehta, is brother of appellant No. 2, who looks after the day-to-day affairs of the firm. The firm is engaged in the manufacture of M.S. Circles, M.S. Rings, M.S. Squares, M.S. Ractangles and other M.S. Profiles and is holding Central Excise Licence for trading the excisable goods. On recording the statement of appellant No. 2 on 10-5-1995, it rev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also avered that the demand was time-barred. The adjudicating authority did not agree with this version of the appellants and passed the impugned order, detailed above. 3.The learned Counsel has assailed the validity of the impugned order, mainly on the ground that the activity of the appellants of carrying out the profile cutting, on the Plain M.S. Plates, purchased from the market, did not amount to manufacture, especially when the goods, so manufactured, were not marketable in the market. The Counsel has also contended that the alleged manufactured goods were not classifiable under sub-heading 7326.90 and that the demand raised was time-barred as the extended period could not be invoked when the Department was in the knowledge of all t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at a manufacturer can be said to take place. But where the commodity retains a continuing substantial identity, though the process through the processing stage, we could say that it has been manufactured." 6.In the second case, the issue before the Apex Court was, whether cutting or punching sheets of plastics amounted to manufacture of a new product. While dealing with the question, the Apex Court observed that mere cutting or punching holes did not amount to manufacture. 7.But, in our view, the stand of the appellants cannot be accepted and the ratio of the law laid down in both the above referred cases, is not of any help to them. In the instant case, the activity of the appellants of conversion of Plain M.S. Plates into M.S. Profile ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax v. Krishna Copper and Steel Rolling Mills, 1992 (193) ITR 281 (S.C.), referred to by the learned Counsel, is of no avail to the appellants. In that case, the Apex Court has observed that one of the main tests evolved to decide whether any manufacture had taken place, is that with the processes employed the commodity so obtained is no longer recognized as original commodity but is instead recognized as a distinct and new article that has emerged as a result of processes. In the instant case, as observed above, new and distinct commodity comes into existence when the appellants make conversion from the Plain M.S. Plates big in size purchased from the market, to M.S. Profiles, Rings, Circles, Angles and Channels as the original commodity i. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r customer for holding the same to be marketable for the purpose of charging excise duty in respect thereof. The Apex Court in the case of A.P. State Electricity Board v. CCE, Hyderabad, 1994 (70) E.L.T. 3 (S.C.), about the marketability aspect of the goods, for the purpose of their dutiability, has observed as under - "Marketability is a question of fact to be decided in the facts of each case. The fact that the goods are not actually marketed is of no relevance. It is also not necessary that the goods in question should be generally available in the market. Marketability does not depend upon the number of purchasers nor is the market confined to territorial limits of India." 10.Keeping in view these observations of the Apex Court, it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ified under the sub-headings disclosed by the appellants. In our view, the classification of the goods in question had been rightly made by the adjudicating authority under sub-heading 7326.90 as "other articles of iron and steel". The findings of the adjudication authority in this regards are upheld being perfectly valid. 13.Then comes the issue of limitation. This issue has been hotly contested by the learned Counsel. The learned Counsel has contended that the demand is time-barred as the Department knew since April, 1991 about the activity of the appellants whereas the show cause notice was served on them on 1-4-1996 raising duty demand from October, 1991 to March, 1995. The extended period could not be invoked as according to the lear ..... X X X X Extracts X X X X X X X X Extracts X X X X
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