TMI Blog2004 (5) TMI 182X X X X Extracts X X X X X X X X Extracts X X X X ..... ets to reduce the width and the thickness of the same. M/s. Srinivasa thereafter send back the goods to M/s. Vittaleshwara in consideration for job charges. M/s. Vittaleshwara, on receipt of the slited and rolled Aluminium strips, painted the same and returned it to M/s. Aldec Corporation in consideration for job charges. M/s. Aldec Corporation sold the painted Aluminium strips in coils as received from the M/s. Vittaleshwara without carrying out any further process on the same. 3. A show cause noticed dated 28-3-1995 covering the period from April 1990 to October 1994 was issued by the Commissioner of Central Excise demanding duty amounting to Rs. 1,51,68,141/- on painted Aluminium Slats besides proposing to confiscate 650.55 kg of painted Aluminium slats seized from the premises and proposing penalty under 173Q of Central Excise Rules. Show cause notice dated 5-7-1995 was issued to them by Superintendent of Central Excise demanding duty amounting to Rs. 9,57,655/- for the period from December 94 to April 95 and also proposing penalty under Rule 173Q of the Central Excise Rules. The main grounds in the show cause notice issued by the Commissioner in March 95 was that M/s. Aldec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 94 was challenged by the appellants before the Commissioner (Appeals) and the Commissioner (Appeals) in his order dated 13-12-1994 passed an order holding that there is no justification to call the appellants as manufactures and set aside the order of the Assistant Commissioner dated 14-11-94. However inspite of this, they received a show cause notice dated 28-11-1995 demanding duty of Rs. 1,51,68,141/- and proposing penal action against them. Ld. Sr. Advocate pleaded that show cause issued by the Commissioner is time barred. The entire operation of M/s. Aldec Corporation, M/s. Vittaleshwara and M/s. Srinivasa was known to the department right from the year 1986 and proceedings initiated by the department were dropped either at the stage of Additional Commissioner or at the stage of the Commissioner (Appeals). In 1994, the proceedings initiated for taking license against M/s. Aldec Corporation were also dropped by the Commissioner (Appeals). Therefore the entire activities of M/s. Aldec Corporation, M/s. Vittaleshwara and M/s. Srinivasa were known to the department and extended period under Section proviso 11A cannot be made applicable for demanding duty. On this ground alone both ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not accepted, then they are eligible for Modvat credit. They relied upon the decision of the Supreme Court in case of Formica India v. CCE - 1995 (77) E.L.T. 511 (S.C.) 7. Shri L. Narasimha Murthy, SDR appeared for Revenue. He pleaded that show cause notices are not time barred as new facts have come to the notice of the department. In the earlier proceedings before the Additional Commissioner or the Commissioner (Appeals), these facts were not available. He stated that M/s. Vittaleshwara and M/s. Srinivas are hired labourers of M/s. Aldec Corporation and they were not independent job worker. He stated that detailed investigation carried out clearly shows that M/s. Aldec Corporation are the manufacturers. In the case decided by the Additional Commissioner in Order-in-Original dated 26-11-1986, he has come to the conclusion that the activity undertaken by M/s. Srinivas does not amount to manufacture under Section 2(f) and the items produced by them are not liable to duty. The Collector (Appeals) in his order dated 27-8-1997 has held that M/s. Vittaleshwara took painting of Aluminium strips which cannot be said to be resulted in manufacture of different goods from the raw materials ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... These sheets are slit to smaller sizes of 50 mm/25 mm width and their thickness is reduced to 0.23 mm. In Para 81, the Commissioner has observed that the Additional Collector in his Order-in-Original No. 74/85, dated 26-11-1986 has held - "In order for an activity to be considered as manufacture as defined in Section 2(f) a new product would emerge. However, in the present case, the product that emerges after the process continues to fall under the same sub-item namely, Tariff Item No. 27(6) as raw material." The Collector (Appeals) in his Order-in-Appeal dated 27-8-1997 held - "In the case of M/s. Vittaleshwara, painting of aluminum strip cannot be said to result in manufacture of goods, different from the raw material painted." However in Para 86 of the impugned order, the Commissioner has now observed that - "the issues relating to classification in the earlier cases are entirely different from the present issue of classification before me. And earlier when the cases relating to M/s. Vittaleshwara and M/s. Srinivasa were decided, M/s. Aldec were not issued a show cause notice.... It is not the contention of the department even now that the process involved at M/s. Srin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sheets of lesser thickness and cutting the sheets into strips and painting the strips does not bring into existence a new product known in the market with distinct character and use. The painted strips can be used for various purposes including for manufacture of 'Venetian blinds'. But these themselves are not a distinct identifiable new product. The decisions relied upon by the learned SDR are not applicable on the facts and circumstances of the present case. Thus apparently no new product has come into existence. However in Para 24 of the impugned order, it is proposed that the finished product which is offered for sale falls under chapter Sub-Heading No. 7616.90. No discussion has been recorded in the Order-in-Original that how this product falls under Chapter S.H. 7616.90. Chapter S.H. 76.16 is for other articles of Aluminium like nails, tacks, staples, screws, bolts, nuts, etc. We do not find that the Aluminium strip can be classifiable under Chapter S.H. 7616. Therefore, we do not find the reason given that the process of manufacture has taken place and other articles of Aluminium have come into existence. Therefore we do not find that any new excisable product has come into ..... X X X X Extracts X X X X X X X X Extracts X X X X
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