S.D. Jha, Member (J)

1. The question now surviving for consideration before us against order dated 16-6-81 passed by the Central Board of Excise and Customs is whether the Aluminium bars manufactured by the appellants by continuous casting and rolling process are aluminium in crude form and are eligible for exemption under Notification No. 43/75-CE dated 1-3-1975.

2. The proceedings against the appellants are the outcome of visit dated 23-12-1977 by Superintendent, Central Excise, with Special checking squad to the appellants' factory. The officers observed that wire rod/bar not eligible for exemption under Notification No. 43/75, dated 1-3-1975 was being manufactured and cleared as crude aluminium bar without payment of duty as eligible for exemption under the said notification. The officers compared what the appellants were clearing as aluminium bars without payment of duty with wire rod manufactured by the appellants in the same factory and were of the view that a slight deviation in the roundness of the product was intentionally brought into disguise it as a bar solely for the purpose of incorrect classification and evasion of duty of excise. The product was manufactured by continuous casting and rolling process-the same process in which wire rods were manufactured in the same factory. Discreet enquiries revealed that the product cleared as aluminium bar by the appellants was intended for manufacture of wires and cables and was used for the same purpose by the recipients of the product. The quantity of such wire rods/bars manufactured during the period May 1977 to December 1977 was 143.442 MT and this was done without payment of duty under 'nil' duty gate passes. On this very allegation a quantity of 3.533 MT of aluminium wire rods/bars available in the stock was seized by the officers of the squad. It was alleged in the Show Cause Notice that in the annual report of the appellant firm for the year 1976-77 the product was referred to as wire rod but in all accounts maintained for Central Excise purposes it was referred to as aluminium bars. The Show Cause Notice charged the appellant with manufacturing wire rods/bars weighing 146.975 MT during May 1977 to December 1977 and declaring them as aluminium bars in Excise documents and clearing the removing a quantity of 143.442 MT without payment of duty. The appellants were called upon inter alia to show cause why duty be not demanded and penalty be not imposed for breach of various provisions and rules of the Central Excise Rules, 1944. The appellants denied the charges and resisted the demand on various grounds. After following the usual procedure the Collector of Central Excise by Order-in-Original dated, August 1980 found the revenue's case made out and found against the appellant. The main reasoning of the Collector for finding against the appellant is that Notification No. 43/75 extends the exemption to only aluminium in crude form and castings. Tariff Item 27 distinguishes between the wire bars and wire rods and castings not otherwise specified even though they have been placed in the same sub-heading. He observed "Considering all the facts stated it is not important to determine whether the goods are bars or rods. What is to be determined is whether they are castings or whether they are aluminium in crude form. The exemption is available to the last two products. It is not available to wire bars and wire rods. The exemption extends to bars which can be described as aluminium in crude form. From the method of production adopted in this factory, the goods cannot qualify as exempted bars as they cannot be described as 'aluminium in crude form'. It will be noted that the tariff item 27(a)(i) has a definite pattern. The aluminium in crude form includes, ingots, bars, blocks, slabs, billets, shots and pellets. All these are crude aluminium on which there has been no working or processing. A bar of the type produced by M/s. Continuous Castings Ltd. which has undergone so mu