Per V.K. Agrawal :

The Common issue involved in these nine appeals is whether the process of conversion of straight grade bitumen into air blown grade bitumen amounts to manufacture.

2.1 The facts in brief in Appeal No. E/4498/93-C are that M/s. Tiki Felt Industries, appellants (TFI), manufactured Bitumen Coated felt. They purchased duty paid hessain cloth, straight grade bitumen, fillers and mica as raw materials. The straight grade bitumen was converted into blown grade bitumen through oxidation, known as blowing process. Such blown grade bitumen was applied on both sides of the hessian cloth. A show cause notice dated 24.1.92 was issued to them for demanding duty in respect of Blown Grade Bitumen (BG Bitumen) falling under subheading 2713.20 of the Schedule to the Central Excise Tariff Act for the period from February, 1987 to September, 1991. The Collector, Central Excise, in impugned Order dated 10.3.93, confirmed the demand of Central Excise duty amounting to Rs. 2,84,981.23, imposed a penalty of Rs. 1,00,000/- and confiscated plant & machinery with an option to redeem the same on payment of fine of Rs. 25000/- holding that the process of conversion of straight grade bitum