Syiem, Member (T)

1. The order under impugnment is the order No. 24/Bare Aluminium Wire/ColIcctor/CE/Cal-II/1987, dated 9-6-87 passed by the Collector of Central Excise, Calcutta. I shall borrow the narration of facts from the Collector's order. In this case the assessee manufacture ACSR (electrical conductors). For the purpose of manufacture of such conductors they draw bare aluminium wires up to 9 SWG from duty paid aluminium wire rods and then use captively such bare aluminium wires upto 9 SWG for drawal of finer gauges, as required by their specification of bare aluminium wires, which in turn are used for the ultimate manufacture of electrical conductors. While using such bare aluminium wires upto 9 SWG for captive consumption for further manufacture of finished excisable goods as indicated above, the assessees did not pay duty on such bare aluminium wires during the period 20-2-82 to 8-7-83 as indicated in the show-cause notice dated 16-2-84. We can now examine these facts in our discussion.

2. The learned Counsel for M/s Electrical Manufacturing Company put it as his first point that they did not manufacture 9 SWG wires; only wires finer than 10 SWG were clear. This is a continuous manufacture and all previous stages between the wire rods and wires finer than 10 SWG must be considered only stages in the manufacture of the final wires, namely, wire thinner 10 SWG. He also argued that Rule 9 of Central Excise Rules allows such continuous manufacturing.

3. The demand was completely time barred since they were guilty of no suppression or of wilfully misleading the department. He read paragraph 5 of 1985(21) ELT 384 re: M/s Rissa Cooperative Spinning. The show-cause notice was dated 16-2-84 and the demand duty for the period 20-2-82 to 8-7-83; there was no suppression.

4. The learned Counsel for the department, however, stated that all the arguments of the opposing counsel were erroneous. The factory did not declare the thicker wires and in the process misled the department and suppressed a fact which would have necessitated payment of duty by them before they took the thicker wires for further use in the manufacture of the finer wires. He quoted for support two judgments, 1985 ELT 28 and 1983 ELT 239.

5. The appellants say that they had filed their classification list in which they had declared electrical conductor wire and this is quite correct. They made this submission to the Collector and he does not deny it. This classification list dated 19-6-80, effective from 19-6-80, declares as their products AC'SR, AAC, EC wires, binding wire, plus other goods. Since wires thicker than 10 SWG were also EC wire, it is not explained in the adjudication order why this declaration was not sufficient. But if the central excise wanted every single gauge to be declared, then I can see no plausible reason why they should demand a disclosure only regarding manufacture of bare aluminium wire upto 9 SWG. They should require declaration of every gauge thicker than 9 SWG, because if we go by their logic, anything upto 9 SWG should be a subject of interest to them as it is a EC wire.

6. When they speak of declaration of bare aluminium wire upto 9 SWG, the answer is that there was no such wire. We must note that the factory did not declare even 10 SWG or finer wires; that they simply declared EC wire. Why the department drew the line at 9 SWG remains unexplained because if they are to be consistent and if their grievance is that bare wire is upto 9 SWG were not declared, then a declaration of EC wire is not certainly enough and cannot cover even wires of 10 SWG or finer. But the central excise found no fault in respect of wires of 10 SWG and finer; only in respect of wires upto 9 SWG.

7. The show cause notice dated 16-2-84 states that in the process of manufacture of the finished goods, namely the ACSR, the factory converted aluminium wire rods into different dimensions upto to 9 SWG and they converted this further into bare wires of finer gauges