K.L. Rekhi, Member

1. The facts of this case in brief are that the appellants manufacture a number of excisable goods falling under different items of the Central Excise Tariff, aluminium wire (item 33B), bolts (item 52), steel wire (item 26AA), rivets and nails (item 68). In his Order-in-Original, the adjudicating Collector held that during the period from 1-4-1979 to 16-3-1981, the appellants clandestinely removed aluminium wire and bolts without payment of duty and also committed other violations of the Central Excises and Salts Act, 1944 and the Central Excise Rules, 1944 by their failure to take out a central excise licence and to maintain the statutory records and submit the prescribed returns. The Collector called upon the appellants to pay the central excise duty and also imposed a penalty of Rs. 5,000/- on them under rule, 173 read with rules 9 and 226 of the Central Excise Rules, 1944. The Central Board of Excise and Customs, acting as the appellate authority, gave the benefit of time-bar to the appellants so far as the period prior to 17-9-80 is concerned, held that charge of clandestine removal was not established but maintained the penalty imposed by the Collector. The appellants filed a revision application to the Central Government against the Board's Order-in-Appeal. The said revision application, on its transfer to this Tribunal, is now before us as the subject appeal.

2. The case was heard by us on 6-5-1983. The period to which the present demand relates is from 17-9-1980 to 16-3-1981. The appellants claimed that there was no liability on them to pay the duty demanded as their goods were exempt under notification No. 80/80-CE. This notification exempted specified goods upto a certain value if manufactured and cleared by small-scale industry units as defined in the notification. Paragraph 2(ii) of this notification states that this notification shall not apply to a manufacturer who manufactures excisable goods falling under more than one item number of the Tariff and the aggregate value of clearances of all excisable goods by him or on his behalf for home consumption, from one or more factories, during the preceding financial year, had exceeded rupees twenty lakhs. The appellants' plea was that aggregate value of clearances of all excisable goods by them in the previous financial year had not exceeded the limit of rupees twenty lakhs while the case of the Department is that they did exceed this limit and hence became ineligible for the exemption contained in notification No. 80/80-CE. In support of their plea, the appellants cited Explanation V contained in this notification which states that for the purposes of computing the aggregate value of clearances under this notification, the clearances of any specified goods, which are exempt from whole of the duty of excise leviable thereon by any other notification, was not to be taken into account. The appellants maintained that they manufactured steel wire from duty-paid steel rods and since such wires were fully exempt under notification No. 206/63-CE, their clearances of steel wire should not be added to arrive at the aggregate value of their clearances in the preceding financial year. When it was brought to their notice that benefit of the Explanation V could not be extended to them because this Explanation applied only to specified goods and steel wire was not included in the list of specified goods in notification No. 80/80-CE, the appellants then relied on the following two arguments in support of their case : -

(1) Steel wire rods and steel wire fell under the same Tariff Sub-item [226AA(ia)], were liable to the same rate of duty, were commercially considered as one and the same thing and thus conversion of rod into wire did not amount to manufacture (1977 ELT J. 199 SC-U.O.I. v. D.C.M. and General Mills. Presenting the Indian Standard Glossary of Terms Relating to Iron and Steel [IS : 1956 Part (V)-1976] and citing the definitions of wire rods and steel