Final Order No. 462/2010, arising from Appeal No. E/351/2006. Case: C.C.E. & C., Guntur Vs Andhra Pradesh Heavy Machinery & Engg. Ltd.. CEGAT (Customs, Excise & Gold (Control) Appellate Tribunal) & CESTAT (Customs, Excise and Service Tax Appellate Tribunal)
| Case Number | Final Order No. 462/2010, arising from Appeal No. E/351/2006 |
| Counsel | For Appellant: Shri V. Raja Ram, DR, and For Respondent: Shri B. Seshagiri Rao, Consultant. |
| Judges | Shri M.V. Ravindran, Member (J) and P. Karthikeyan, Member (T) |
| Issue | Central Excise Act, 1944 - Section 3 |
| Citation | 2010 (253) ELT 688 (Tri - Bang) |
| Judgement Date | February 18, 2010 |
| Court | CEGAT (Customs, Excise & Gold (Control) Appellate Tribunal) & CESTAT (Customs, Excise and Service Tax Appellate Tribunal) |
Order:
P. Karthikeyan, Member (T), (South Zonal Bench, Bangalore)
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This is an appeal filed by the Revenue. The issue involved is whether the ''roof bolts'' and ''W straps'' prepared and cleared by the respondents for use in mines are manufactured goods exigible to duty. In the impugned order, the Commissioner (Appeals) held that no manufacture was involved in their production. He recorded the process of production of these goods in the following words:
(1) W straps - hot re-rolled sheet of 225 mm width, 3.15 mm thickness, cut into different lengths of 2.4 mtrs, 3 mtrs, 3.6 mtrs and 4 mtrs, as per the requirement to form a structure resembling alphabet ''W'', with the aid of a machine called press break machine. Holes are punched with a punching machine to insert the roof bolts.
(2) Roof bolts - Steel rods of 20mm and 22mm dia will be cut into different sizes of 1.2 mtrs, 1.5 mtrs, 1.65 mtrs, 1.75 mtrs and 1.8 mtrs. Smithy work is done to form taper at one end and threading at the other end for fixing nuts.
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In passing the impugned order, the Commissioner (Appeals) reasoned that the public were not aware of W straps and roof bolts. They did not know the use of these goods, because they were not useful for the public. Roof bolts did not conform to any of the IS/ISI standards for nuts. W strap was not a roof material and was specially designed for mechanical appliance for underground mining activity to protect men and machinery. The impugned W straps were of thickness 3.15 mm and used to prevent falling off of roof/side walls in the mines. General roofing material was only one mm thick. The adjudicating authority had failed to bring on record evidence that any new commodity known to the market emerged in the production of these goods. Revenue had not furnished evidence to substantiate that any new commodity known to the market emerged. Names were given by the appellant to the goods only for the purpose of identification of parts fabricated by it. They were not marketable.
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In the appeal filed by the Revenue, the findings of the Commissioner (Appeals) have been assailed as incorrect. They have relied on a decision of the Tribunal in the case of Sanjay Industrial Corporation v. CCE, Mumbai reported in 2003 (155) E.L.T. 369 wherein it was held that conversion of plain MS plates into MS profiles, rings, circles, channels and angles through process of profile cutting amounted to manufacture as new and distinct products emerged in the process. In the case of Mahindra & Mahindra Ltd. v. CCE, Aurangabad, Chandigarh, Kanpur and Chennai reported in 2005 (190) E.L.T. 301 (Tribunal-LB), the Tribunal held that fabrication amounted to manufacture as raw materials like angles, plates, tubes, etc., acquired distinct shape to suit the structural design. No mere drilling of holes was involved. This decision squarely applied to the facts...
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