ORDER
C.N.B. Nair, Member (T)
1. The impugned order demands duty on aluminium channels (given the shape for use in manufacture of suitcases) under Tariff Item 7613.90 and 83.07. Arguing the appeal ld. Counsel Shri Gautam Dutta draws our attention to paragraph 4(1) of the impugned order which mentioned the processes carried out by the appellants on channels procured by them from the market. These processes are :-
(i) Corner Cuttings
(ii) Bending strip fitting
(iii) Bundings
(iv) Hand stamping
(v) Free heating for bending strip removal
(vi) Pre-heating stage inspection
(vii) Joining strip fittings
(viii) Heat treatment
(ix) Drilling
(x) Piercing/Slotting
(xi) Polishing
(xii) Anodising
2. Shri Dutta ld. Counsel submits that these processes are carried only to make the channels of the size suitable for use in the manufacture of suitcases. They continued to be aluminium channel even after carrying out of these processes. They have not become any new goods liable to Central Excise duty. He submits that it has been held in a large number of judgments that bending, cutting to size, drilling, etc. do not amount to manufacture. He referred in particular to decision of the Tribunal in Collector of Central Excise, Baroda v. Dodsal Pvt. Ltd., Baroda – 1987 (28) E.L.T. 352 wherein the Tribunal held that straightening, cutting, bending, punching and galvanising of steel angles, plates, channels and bars as per specifications of supplier do not amount to manufacture and the decisions of the Tribunal in Standard Industrial Engineering Co. v. Collector of Central Excise -1988 (38) E.L.T. 196 (T), Collector of Central Excise v. SAE India Ltd. – 1993 (66) E.L.T. 212 (T) and Dodsal Mfg. (Pvt.) Ltd. v. Collector of Central Excise – 1993 (67) E.L.T. 138 (T), etc. Shri Negi, ld. SDR submits that the channels procured by appellants and the product emerging after submitting them to the processes to give them the require shape and size are very different items. This amounts to manufacture. He also relied on the decision of the Kerala High Court in the case of Electrical & Hardware Industries v. Union of India -1997 (95) E.L.T. 27 : 1984 (17) E.L.T. 127 and submits that jobs like cutting, drilling, welding could be called manufacture. He submitted that in the case of Electrical and Hardware Industries, supra, the Kerala High Court had held that cutting, drilling and welding carried out on MS angles amounts to manufacture of a distinct product, namely, cross-arms. Similarly, in the case of Simplex Castings (P) Ltd. – 1997 (94) E.L.T. 502 it has been held that cutting to size and welding as per sizes and specifications brought into existence a new product.
3. In reply, ld. Counsel Shri Gautam Dutta submitted that the decisions cited by the ld. SDR are not applicable in this case. With regard to the judgment of the High Court of Kerala he submitted that no final decision on the question of manufacture had been rendered by the High Court. The High Court only took note of the observations and findings in the proceedings before the Central Excise authorities and refused to grant relief under Article 226 of the constitution as the assessee had an alternate remedy in the form of appellate channels. He therefore, submitted that this judgment should not be taken as the decision of the High Court in issues involved. With regard to the decision of the Tribunal in Simplex Castings Pvt. Ltd., supra, he submitted that decision related to cutting to size, bending to shape and welding of steel according to specific drawings to form steel bands which are used in moulds. Contrary to this, in the case of VIP Industries the processes carried out were elementary in nature that of cutting the channels to sizes and bending them to shape to prepare them, for use in the manufacture of suitcases. These processes do not led to manufacture of any distinct goods. They are only processes which alter size and shape. At the end of them, channels continue to be channels.
4. We have perused the case records and the case law cited and have considered the rival submissions. We find that the processes involved in the instant case only prepare the channels for use in further manufacture of suitcases. No distinct, new product comes into existence. We, therefore, hold that the appellant’s case is similar to the cases where the Tribunal had decided that cutting to size, bending to shape, etc. do not amount to manufacture. We also find that the judgment of the High Court of Kerala does not lay down the law with regard to processes like cutting, drilling etc., that they amount to manufacture. They are only in the nature of observations made while dealing with the writ petition. Similarly, the facts involved in the decision of the CEGAT in Simplex Castings Pvt. Ltd., supra, is not comparable to the appellant’s case in as much as a new product is held to have come into existence on account of cutting, bending and welding of steel plates in that case.
5. In view of the foregoing discussions, the appeal succeeds and is allowed with consequential relief to the appellants.