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CUSTOMS, EXCISE AND GOLD (CONTROL) APPELLATE TRIBUNAL, BOMBAY
U.L. BHAT, V.P. Gulati, JJ.
Tansi Engineering Works Tirupur -Appellant
Versus
Commissioner of Central Excise, Coimbatore -Respondent
Order No. 1370/96 Appeal No. E/SB/1229/91, 1370 of 1996, E/SB/1229 of 1991
Decided On : 22-08-1996
Per Justice U.L. Bhat :
1. The appellant is a State Government Undertaking engaged in fabrication of tower components, transformers, structural materials and steel structures for building construction, as per contract entered into with Tamil Nadu Electricity Board and others. The appellant has been purchasing angles and channels from the market and subjecting the same to straightening, cutting and punching before supplying the same to their customers. Such supplies have been made without paying Central Excise duty.
2. Notice was issued to the appellant in respect of the period 28.2.86 to 14.2.88 informing that the products referred to above are subject to excise duty as they fall under heading 7308.90 and requiring the appellant to show cause why duty on the value of the products so cleared should not be demanded. The appellant resisted the notice contending that angles and channels when cut and punched do not cease to be angles and channels and do not become a new commodity as known in the market and as such the appellant was not "manufacturing" these products and therefore, there was no duty liability. The Additional Collector over ruled this contention and confirmed the demand to adjust the part payment made by the appellant. It is this order which is challenged now.
3. The appellant placing reliance on number of earlier decisions of the Tribunal contends that the main finding that the appellant has "manufactured" angles and channels is unsustainable and the products not having been "manufactured" within the meaning of Section 2 (f) of the Central Excises & Salt Act 1944 (for short the Act) are not dutiable and the order impugned is erroneous.
4. The JDR supported the impugned order contending that cutting and punching of holes would change the nature and character of the angles and channels and would therefore amount to "manufacture".
5. There are a large number of decisions of the Tribunal dealing with similar activity, viz. cutting and punching of angles and channels. In all those cases, these products were being made for the purpose of use in towers or other structures. The decisions are:
i) CCE Vs. Dodsal Pvt. Ltd., 1987 (28) ELT 352 :
ii) Pratap Steel Rolling Vs. CCE, 1990 (48) ELT 539 :
iii) R.S. Steel Works Vs. CCE, 1993 (64) ELT 469 :
iv) Dodsal Mfg. Pvt. Ltd. Vs. CCE, 1993 (67) ELT 138 :
The consistent view taken by the Tribunal in these decisions, some of which related to periods prior to the enactment of the Act 5/86, amending the definition of "manufacture" in section 2 (f) of the Act and others to periods subsequent to the amendment. The consistent view taken is that activity such as cutting and punching of holes in angles and channels for use in transmission towers and structures would not amount to "manufacture" within the meaning of Section 2 (f) of the Act.
6. The Department places reliance on the entry in Heading 73.08 in the Schedule to the Central Excise Tariff Act, as the same existed in 1988; which reads thus:-
"73.08: Structures (excluding prefabricated buildings of heading No. 94.06) and parts of structures (for example, bridges and bridge sections, lock-gates, towers, lattice masts, roofs, roofing frameworks, doors and windows and their frames and thresholds for doors, shutters, bal-ustrades, pillars and columns), of iron or steel; plates, rods, angles, shapes, sections, tubes and the like, prepared for use in structures or iron or steel)" (Emphasis applied)
7. The contention of the Department that angles are specifically included in the above tariff and channels would attract the description "shapes", and would at any rate attract the expression "and the like" and therefore the appellant who has brought into existence angles and channels for use in structures of iron and steel must be held to have manufactured by the same. The question whether a product is of "manufactured" and whether the process adopted is a process which amounts to "manufacture" under section 2 (f) of the Act is a matter which has to b
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