Harish Chander, Member (J)

1. The point to be decided in the present appeal is whether the fabricated steel structures weighing 26533.179 MT falling under Tariff Item 68 valued at Rs. 9,48,58,000.91 from the raw materials like channels, angles, H.R. Sheets, C.R. Sheets, M.S. Plates, Rounds etc. to different manufacturers after obtaining due permission under Rule 56C and received back the finished goods like fabricated steel structures classifiable under Tariff Item 68 from such secondary-manufacturers under Rule 56C are liable to Central Excise duty or not. A show cause notice was issued to the appellants for alleged contravention of Rule 56C read with Rules 9, 173F and 173G for removal of 26,533.179 MT of fabricated steel structures falling under Tariff Item 68 received from different secondary manufacturers without payment of excise duty amounting to Rs. 75,88,680.23 during the month of January, 1983. It was also pointed out in the show cause notice that why the demand issued under D.D.2 No. 3258, dated 26-7-83 should not be confirmed and that the penalty should not be imposed on them under Rule 173Q of the Central Excise Rules, 1944. In response to the same the appellants stated that Joists, Girders, Angles, Channels, Plates, Sheets etc. are fabricated steel structures and covered under erstwhile item 26AA of the Central Excise Tariff. Therefore, the question of payment of duty under Tariff Item 68 on such structures did not arise. The appellants had purchased duty paid steel products and paid duty on their products falling under Item 26AA and these were cut to shape and size and taken to the site for construction of structures attached to the earth. They claimed that such fabricated materials processed from duty paid articles falling under erstwhile Item 26AA could not be classified under Tariff Item 68 since such items retain its identity as the original goods and does not produce any new materials other than that from which these have been fabricated. It was also stated that the appellants have not contravened Rule 56-C read with Rules 9, 173F and 173G of the Central Excise Rules as they had issued GP-1/Despatch challans and same were forwarded to the Central Excise Officers. Therefore, there was no suppression of facts from the proper officer of the Central Excise. As a matter of fact, the proper officer of the Central Excise has based the demand on the basis of information furnished in GP-1/ Dispatch Challans. The appellants neither manufacture nor remove new excisable commodities. Accordingly, contravention of Rifle 9 does not arise and they have also not contravened Rule 173F as they did not manufacture any new excisable commodities. It was also pointed out that since no duty was payable on the materials processed and sent to site and as such they did not determine any duty. The copies of such gate passes, despatch challans were forwarded to the proper officer of the Central Excise. It was also contended that the violation of Rule 173 under Sub-rule (1) to this rule was specified in the show cause notice and as such they were unable to state anything in this regard. They further claimed that in the show cause notice a reference to DD-2 had been drawn and it appeared that DD-2 had been issued prior to the show cause notice. In Rule 9(2), if any excisable goods were removed in contravention of Sub-rule (1) to Rule 9, the written demand made within the period specified in Section 11A of the Central Excises and Salt Act, 1944 by the proper officer. The written demand has to be made under Rule 9 in accordance with Section 11A of the Act. In such cases the Central Excise Officer may within 6 months from the relevant date serve on the person a demand charging the duty which has not been levied or paid requiring him to show cause as to why he should hot pay the demand specified in the notice. The appellants claimed that prior to issue of demand under DD-2, it was Incumbent to issue a notice to show cause. Since the deman