M. Santhanam, Member (J)

1. The appellants own a factory where wire-drawing operations are carried out. Wire rod in coil form is the raw material and the final product is wire rod in coil form of a lesser diameter. The appellants filed classification list under T.I. 26AA. While assessing RT-12 Returns, the department raised a demand of Rs. 1,03,873/- on the ground that the process of drawing of wires from wire-rods amounted to manufacture and that the wires so drawn were excisable under T.I. 26AA(i-a). The Assistant Collector also imposed a penalty of Rs. 3,000/- and confirmed the duty demand.

2. On appeal, the duty was confirmed but the penally was set aside.

3. Shri Darshan N. Shah, Partner of the appellants submitted that the duty paid on rods of thickness 6 mm and 8 mm formed the raw materials and the wires drawn are of the thickness of 3 mm, 4 mm and 5 mm respectively. According to him, another firm got the benefit of refund and the benefit of Notification 75/67-CE was extended. Since both the products would come under the heading 'wires', the appellants pray for setting aside the demand.

4. Sh. J.N. Nigam, SDR, urged that the demand relates to the period April, 1980 to April, 1981 and that the assessments have been made on the RT-12 Returns. A show cause notice was issued on 18-8-1981. The SDR urged that the wire rods are different from wires drawn therefrom. Duty could be charged even if the two items fell under the same sub-items. He placed reliance on the decision reported in 1983 ELT 984 (M/s. Krishna Wires Industries, Jaipur). In that case, the question arose whether steel wires drawn from wire-rods would be liable to duty. The Tribunal held that the steel wire manufactured by the appellants was a distinct commercial product and that the said manufacturing activity attracted the provisions of the Central Excise Act and Rules. In MANU/CE/0041/1986 : 1986 (24) ELT 542 (M/s. Guardian Plastic Coat Ltd., Calcutta), the Larger Bench of the Tribunal, following the decision of the Supreme Court in Empire Dyeing Mills MANU/SC/0186/1985 : 1985 (20) ELT 179 (S.C.) has held that the excisable commodity would also fall under the same Tariff Item or even under the same sub-heading of the same tariff item would not make any difference as to the liability for duty with reference to the new excisable commodity. In MANU/CE/0189/1987 : 1987 (30) ELT 578 (M/s. Sreenivasa Metal Industries), the issue was whether circles cut from duty paid aluminium strips would be liable to duty. There was a difference of opinion between two of the Members which was referred to the Hon'ble President. It was held that the duty could be levied once again on the resultant products. Sh. Nigam submitted that no limitation would arise as the demand was raised on the RT-12 Returns.

5. I have carefully considered the contentions of both the parties. It is a common case that the wires are drawn from the wire-rods. The Tariff Entry 26AA(i-a) reads as follows :-

"Bars, Rods, Coils, Wires, Joints, Girders, Angles other than slotted angles, channels other than slotted channels, Tees, Beams, Zeds, Trough, Piling and all other rolled, forged or extruded shapes and sections, not otherwise specified.

6. The appellants would urge that there is no manufacture and that it is merely drawing of wires of thinners gauges, namely, 3 mm, 4 mm and 5 mm from rods of thickness 6 mm and 8 mm. The department, on the other hand, would urge that the wire rods are known distinctly in the market and the drawing of the wire of a differential gauge would amount to manufacture.

7. We are of the view that the controversy could be disposed of on a perusal of the explanation of term 'wire' occurring in 26AA. The wire means "cold drawn products of hot section of any cross sectional shape of which no cross sectional dimension exceeds 13 mm". This explanation indicates that upto a cross sectional dimension of 13 mm, the product would continue to be a wire. The facts of the present case indicate that