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Khemani Metal Industries Pvt.Ltd. v/s CCE, Jaipur-I

    Appeal No.E/1233 of 2006-Ex (Arising Out of OIA No.67(HKS)CE/JPR-II of 2006 dated 24.1.2006 passed by CCE(Appeals), Jaipur)

    Decided On, 05 March 2014

    At, Customs Excise Service Tax Appellate Tribunal Principal Bench New Delhi

    By, THE HONOURABLE MR. JUSTICE MANMOHAN SINGH
    By, MEMBER (TECHNICAL)

    For the Appellant: None. For the Respondent: Devender Singh, JCDR.



Judgment Text

Manmohan Singh, J.

1. Appeal is of 2006 and has been rolling on board. Notice was issued on 9.1.2014 but no one caused appearance from the appellant’s side. Since the matter is of 2006, I proceed to decide the matter with the assistance of learned JCDR.

2. While going through the order of the Commissioner (Appeals) No.67(HKS)CE/JPR-II/2006 dated 24.1.2006, I find that the issue for consideration was whether cold rolled stainless steel patta subjected to rerolling process will amount to manufacture or not. It is observed that the Commissioner (Appeals) in para 8 and 9 has dealt with matter in detail.

3. Learned JCDR points out that the judgment of the Tribunal in Indian Strips vs. CCE, Ahmedabad-2004 (173) ELT 265 (Tri.-Mum) wherein after following amendment in the chapter 4 to chapter 72, it was held that cold rolling process will amount to manufacture and duty was demandable. For the purpose of clarity, para 20 is reproduced as under:-

20. The Commissioner relies on Chapter Note 4 of Chapter 72, which reads thus In relation to flat rolled products of this chapter, the process of hardening or tempering shall amount to manufacture, to say that the activity carried out by the appellants amounts to manufacture. He observes that such a chapter note was not in existence when the Supreme Court pronounced its judgment reported in 1995 (77) E.L.T. 248. He says that under the new tariff this note has been incorporated which enables the department to levy duty on products which have undergone the process mentioned in the chapter note.

4. Heard both sides.

5. After going through the facts on records as well as pleadings of both the sides, I observed that main issue for consideration is whether reduction in gauge by way of cold rolling process will amount to manufacture or not. On perusal of Commissioner (Appeals)s order-in-appeal No. 67(HKS)CE/JPR-II/2006, it is observed that issue has been analysed in detail by the Commissioner (Appeals). In para 8 and 9, he has clearly brought out that on the basis of chapter note 4 of chapter 72 which reads as In relation to flat rolled products of this chapter the process of hardening or tempering shall amount to manufacture. Activity undertaken by the appellants will amount to manufacture. For ready reference para 8 and 9 of the order are reproduced below:-

8. I have gone through the records of the case and submissions of the appellant at the time of personal hearing as well as in the appeal memorandum. I find that the appellants refund claim was based on the ground that the process of conversion of SS Hot rolled patta patti into SS Cold rolled patta patti does not amount to manufacture in the light of the decision of Hon’ble Supreme Court in the case of CCE vs. Steel Strips Ltd.-1995 (77) ELT 248 (SC) and Hon’ble Tribunal’s decision in the case of Steel Strips vs. CCE-2001 (130) ELT 137 (Tri.-Del.). I have gone through the said decision of Hon’ble Apex Court. This decision was with reference to old Tariff Item 26AA. In the present Central Excise Tariff Act, 1985, chapter note 4 of chapter 72 reads In relation to flat rolled products of this chapter the process of hardening or tempering shall amount to manufacture. Such a chapter not was not in existence when the Hon’ble Superme Court pronounced its judgment reported in 1995 (77) ELT 248 (SC). Further the department’s appeal was dismissed in that case not because it held that the process of cold rolling does not amount to manufacture but because the department failed to establish in the case before it that the process amounted to manufacture by leading evidence. The Hon’ble Supreme Court considered its decision cited supra -1995 (77) ELT 248 (SC) in the case of CCE, Chandigarh-II vs. Steel Strips-2003 (154) ELT 336 and remanded the case directing that the issue whether cold rolling a hot rolled product amounts to manufacture be examined on the following lines:

Whether the Excise authorities have led any evidence before the first adjudicating authority on the question as to whether cold rolled strips are the result of a process of manufacture undertaken by the respondents, or whether the material referred to in the order of the Assistant Commissioner is based upon his own personal knowledge or is based on authoritative publications. The burden is on the department to prove that the process of manufacture resulted in emergence of a commercially distinct commodity.

9. The Hon’ble Tribunal in the case of Indian Strips vs. CCE, Ahmedabad-2004 (73) ELT 265 (wrongly cited by the appellants as Indian Strips & others V/s. CCE 2001 (47) ELT 498) put the appeal to the test as indicated by the Hon’ble Supreme Court in the case cited supra. After considering all the aspects the Hon’ble Tribunal upheld the findings of the Commissioner that reducing the gauge and hardening the strips amounts to manufacture and also that S.S.patta/patties are distinct marketale commodity. In the case of Indian Strips (supra) S.S. patta/patties were manufactured from S.S.flats. In the instant case also the product S.S.patta/patties were being manufactured from S.S.flats. Therefore, the present case is identical t

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o the case of Indian strips (supra) and accordingly the ratio laid down by the Hon’ble Tribunal in the said case would squarely applicable to the present case also. Following the above said decision, I hold that conversion o S.S.flats into S.S. patta/patties amounts to manufacture and the appellants have correctly paid the duty. As such, no refund is admissible to them. Accordingly impugned order is upheld. 6. In view of clear findings above, I do not feel any need for intervention. I uphold the findings of the Commissioner (Appeals) and reject the appeal.
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