ORDER
Shri S.L. Peeran
1.
In this stay application, applicant is seeking waiver of pre-deposit of duty amount of Rs. 27,25,543/- confirmed on the clearance of MS wire / nails / GI barbed wires cleared without payment of duty during the period from 1994-95 to 1998-99 under Rule 9(2) of C.E. Rules, 1944 read with proviso to Sec. 11A (1) of C.E. Act, 1944.
2. Against the appellant S.H. Yasmeen & Co. penalty under Section 11AC of Rs. 18,83,384/- and further penalty of Rs. 5 lakhs has been imposed under rule 173Q of C.E. Rules for removal of excisable goods without payment of duty in violation of Central Excise provisions during the years 1994-97. The charge brought out against the appellants is that they were trading through the outlets in collusion with all the three units and they have cleared these items and claiming that they were entitled to the benefit of the Notification No. 1/93 and 16/97 and 8/98.
3. The department proceeded to confirm the demands on the ground that all the manufactured items have crossed the limit and appellants have manufactured and removed solely with an intent to evade payment of duty.
4. Ld. Chartered Accountant Shri P.C. Anand submits that drawing of wires from rods is a settled issue by the judgement of Apex Court rendered in the case of VISHVAMAN INDUSTRIES Vs CCE Delhi-I reported in 2001 (42) RLT 724 (CEGAT) and another judgement of 2001 (44) RLT F5. He also points out that the judgement of the Tribunal rendered in the case of PREMIER WINDING WIRES & CONDUCTORS Vs CCE Nagpur 2000 (115) ELT 698 (Tri) has been confirmed by the Apex Court as reported in 2000 (119) ELT A242. He also refers to the following judgements to support his plea that drawing of wires from MS rods is not a process of manufacture and they are not goods:-
(1) CCE New Delhi Vs MITHAN WIRES – 1999 (34) RLT 252 (CEGAT)
(2) CCE Calcutta Vs. INDIAN PIN MFG. CO. – 1999 (34) RLT 321.
(3) NAVSARI PROCESSING INDUSTRIES Vs. CCE Baroda – 1996 (85) ELT 386 (Tri)
(4) JYOTHI ENGG. CORPORATION Vs. CCE – 1989 (42) ELT 100 (Tri) which is upheld by Supreme Court vide 1990 (48) ELT A24.
5. As regards other two items viz. barred wire and nails, he refers to annexure to SCN and points out that even in terms of the allegations made by the department and even in terms of annexure to SCN clearances in respect of barbed wires and nails, the clearances were within the exemption limit and therefore confirming the demands without considering the judgements cited is not a correct order and the Commissioner ought to have granted the exemption in respect of barbed wires and nails, as they fell within the limit of exemption notification. He submits that the order is not a speaking order and has violated the principles of natural justice. Hence, he seeks for remand of the matter for de novo consideration, as the issue of manufacture of MS wires from MS rods not resulting in goods had not been examined in detail in the light of the judgement cited. He submits that no finding has been recorded on this point despite the citation being shown to the Commissioner.
6. Ld. DR defends the order and submits that the issue of drawing wires from MS rods ad the plea of the same not amounting to manufacture was not agitated in reply to the SCN and also before the Commissioner and hence the Commissioner cannot be faulted for having proceeded to hold that MS wire are goods. In so far as the argument on barbed wires and nails are concerned, Ld. DR points out that even now the partly and the Chartered Accountant are not disputing the fact that they are goods. The aspect pertaining to clearances within the limit is a matter which has to be seen at the final stage. He submits that as the duty involved is more, revenue’s interest is to be safeguarded by directing them to pre-deposit the amounts.
7. We have carefully considered the submission and on perusal of the submissions of the judgments cited by Commissioner (Appeals), we notice from these judgments that it has been clearly laid down that drawing of MS wires from MS rods does not amount to manufacture and the item is not goods. This submission, we notice, was made before the Commissioner but he has not recorded any finding and if this aspect is reconsidered as claimed by Ld. C.A. then the only aspect required to be considered is as to whether barbed wires and nails cleared were within the exemption limit. Annexure to SCN have been placed before us to show that clearance figure of both the items were within the exemption limit. On perusal, prima facie, we find this contention to be correct. Therefore, we accept the prayer for grant of waiver & stay of recovery and also to remand the matter to the Commissioner for de novo consideration. Thus, after granting waiver & stay, appeals are taken up & allowed by remand to the Commissioner with a direction to reconsider the question of manufacture and examine as to whether the MS wires drawn from MS rods amounts to manufacture and whether they are goods and rendered his finding in the light of judgement cited by Ld. C.A. Prima facie, as we find that they are nt goods and if the appellants can satisfy in the light of these judgements that drawing of MS wires from MS rods does not amount to manufacture, then the only question that would be before the Commissioner is as to whether clearances of barbed wires and nails was within the exemption limit. The Commissioner shall therefore readjudicate the matter in the light of the submissions and the judgements cited, after following the principles of natural justice.
(pronounced and dictated in open court)