ORDER
G.R. Sharma, Member (T)
1. The captioned two appeals arose out of the same order passed by the Collector (Appeals). Therefore, the two appeals are being disposed by this common order. The Collector (Appeals) in the impugned order had held as under :
“The contention of Mr. Das that the Central Excise Officers are also not aware of the correct classification because in the first letter dated 4-4-1983 of the Superintendent it was stated that the Bare Aluminium Strips fall under Item 33(b) of the CET, but in the show cause notice the same are said to be falling under Item 27(b) of the CET is correct. There was confusion on the part of the local Central Excise Officers. Examination of the sample of a product exhibited in the course of hearing shown that the product in dispute is in the form of rectangular shape. It is in the form of a strip. Therefore, classifying the product under Item 27(b) of the CET is correct. However, the allegation that there was suppression of manufacture of Aluminium Strip at the intermediary stage of manufacturing double paper cover Aluminium Strips is not correct inasmuch as the appellants in their first declaration dated 16th April, 1983 submitted to the Superintendent, Central Excise, Bhubaneswar Range, mentioned in Item 9, that rods are made into strips which are later on annealed and covered with insulating paper. Therefore, the argument of Mr. Das that the demand has to be restricted to the period of 6 months from the date of issue of show cause notice is accepted. As a result, the order of the Assistant Collector is set aside and the case is remanded back to him for fresh decision according to law and principles of natural justice. Since the classification of the end-product, namely, D.P.C. Aluminium Strips is not the issue in this appeal, I do not make any observation”.
2. M/s. Dak Alloys have filed the appeal on the ground that they were merely shaping aluminium rods into rectangular strips for the purpose of manufacture of aluminium D.P.C. Strips and that they were not carrying out any manufacturing activity following in transformation of any material such as is done in extrusion or rolling process for manufacture of aluminium strips carried on by big manufacturers like Indian Aluminium and Bharat Aluminium and there being no manufacture of aluminium strips, the intermediary product cannot be classified under Tarrif Item 27(b) of the First Schedule of the Central Excise Tariff.
3. The department has come up in appeal against the order passed by the Collector(Appeals) on the ground that the Collector (Appeals) had erred in holding that there was no suppression of manufacture of aluminium strips inasmuch as the appellants had filed declaration in respect of DPC Aluminium Strips under Tariff Item 68 and that the assessee had not mentioned Bare Aluminium Strips in their declaration and as such the provision of Section 11A invoking longer period of five years were attracted.
4. Briefly stated the facts of the case are that M/s. Dak Alloys are engaged in the manufacture of DPC Aluminium Strips; that for manufacture of the aluminium strips, the assessee has been purchasing aluminium wires/ rods. On 4-10-1983, the Central Excise staff visited the factory of the assessee and seized 50.1 kg DPC Aluminium Strips and 125 kgs. of defective DPC Aluminium Strips and alleged that the intermediary product of making rods into strips was excisable to excise duty under the then Tariff Item 27(b) of the First Schedule to the Central Excises and Salt Act, 1944. Accordingly, a show cause notice was issued by the department to the assessee on 24-2-1984 asking them to explain as to why the bare aluminium strips manufactured as intermediate product should not be classified under T.I. 27(b) and also why the seized goods should not be confiscated and penalty should not be imposed for contravention of Central Excise Rule 174 read with Section 6 of the Central Excises and Salt Act, 1944, Rule 9(1), Rule 49, Rule 51A, Rule 173F, Rule 173G and Rule 173Q. After considering all facts on record and submissions made by the assessee before the Assistant Collector, the Assistant Collector confirmed the demand, confiscated the seized goods and imposed a penalty. The demand was confirmed after invoking the proviso to Section 11A. The assessee went in appeal to the Collector (Appeals). The relevant portion of the order of the Collector (Appeals) is already reproduced in the preceding paragraph.
5. Shri J.S. Agarwal, the learned Advocate appearing for M/s. Dak Alloys submitted that the assessee was purchasing the aluminium wire rods and was flattening them into aluminium strips and then insulating them to convert them into DPC Aluminium Strips. It was argued by the learned Advocate that the assessee did not have a strip mill. He submitted that the Hon’ble Supreme Court in the case of Collector of Central Excise v. Calcutta Steel Industries reported in 1989 (39) E.L.T. 175 had held: “It is also to be borne in mind that the very nature of the mill was a criteria to decide the nature of the product manufactured”; that this clearly shows that the item manufactured by them was flattened wire and not a strip.
6. The learned Counsel submitted that the intermediate product termed as ‘Bare Wire Aluminium Strips’ by the department was a flattened wire rod; that this Tribunal in the case of Mitter Sain Industries reported in 1989 (44) E.L.T. 182 (T) had held : “Flattened aluminium wire rods produced by redrawing through dies were not classifiable as strips when goods were not established by the department to be having rectangular cross-section”; that the product manufactured by the assessee in the instant case was a flattened rod and therefore in view of the Tribunal judgment, goods in this case was not classifiable as aluminium strip.
7. That in the case of Arunachal Forests Products Ltd. reported in 1993 (66) E.L.T. 345 (Guwahati), the Hon’ble Guwahati High Court had held :” The meaning given in the Glossary of Terms can in the absence of other evidence, be regarded as reflecting sense in which the particular trade understands the names”. Elaborating his point, the learned counsel submitted-that no definition of strip was given in the Tariff and therefore, specification of Indian Standard Institute (ISI) should be a guide; that under IS-5047 (Part 1) – 1986 under sub-heading 2.2.4 defined the ‘strip’ as hot or cold rolled product of rectangular section, over 0.15 mm but less than 6.00 mm thick. It may be either in straight length or in coil form. Similarly the flattened wire under sub-heading 2.2.17.2 has been defined as “A solid section having two parallel flat surfaces and round edges produced by roll flattening round wire”. The learned counsel therefore, submitted that what was produced as an intermediate product was a flattened wire and that flattened wire was reconised as a product by the above Indian Standard Glossary of Terms.
8. On limitation, the learned Counsel submitted that the demand was for the period from 20th April, 1983. The show cause notice was issued on 20th March, 1984 and that the show cause notice has been issued extending the period beyond six months; that there was no suppression, misstatement etc. on the part of the assessee; that the declaration was filed at the begining of the manufacture in which the final product was shown as DPC Aluminium Strips; that the declaration was complete and there was nothing misstated or suppressed. The learned counsel therefore submitted that in view of. the above submissions and the facts on record, the appeal of the assessee on the question of classification of Bare Aluminium Strips may be accepted holding that there was no manufacture of aluminium strips and as such the intermediate product was not classifiable under T.I. 27(b).
9. The learned Counsel also submitted that the department’s appeal on the question of invoking the proviso to Section 11A may be rejected as there was no misstatement or suppression of facts.
10. Shri Somesh Arora, the learned JDR appearing for the Revenue submitted that in so far as the classification of aluminium strips is concerned, their case is squarely covered by the decision of the Hon’ble Supreme Court in the case of Collector of Central Excise v. M.P. Electricals reported in 1994 (73) E.L.T. 263 in which the Hon’ble Supreme Court held :
“8. Copper and aluminium strips, even though insulated, remain copper and aluminium strips and fall within the manufactures of copper and aluminium respectively. Tariff Items 26A and 27 are, therefore, closely related to and indentifiable with insulated copper and aluminium strips respectively. Tariff Items 68, which speaks of goods which are not elsewhere specified in the schedule, is, consequently inapplicable. We are, therefore, of the view that the assessees must be assessed upon the insulated wire under Tariff Items 26A and 27”.
The learned JDR submitted that the facts in the two cases were identical inasmuch as in the case decided by the Hon’ble Supreme Court, the assessee manufactured copper and aluminium electrical conductors. It purchases duty paid wire rods of copper and aluminium of electricals grade and subject them to the process of pickling and shaving. That in this case also, the wire rods were drawn to reduce their diameter. They were then passed through a wire flattening mill to obtain rectangular conductors and the conductors underwent the process of insulation; that the facts in the instant case are identical and therefore, this decision of the Hon’ble Supreme Court is squarely applicable to the facts of the present case.
11. On the question of limitation, the ld. JDR submitted that the fact remains that the assessee in their letter No. DA/30/249/83, dated 24-06-1983 stated that they were manufacturing only DPC Aluminium Strips, at present under T.I. 68, no other product was manufactured by them; that this clearly shows that the assessee had failed to reveal the fact that they were manufacturing aluminium strips. Thus there was suppression and therefore, provisio to Section 11A was rightly invoked by the Departmental Authorities.
12. Heard the submissions of both sides and perused the record. On careful consideration, we find that the issue for determination before us is whether bare aluminium strips are goods and if so whether they are classifiable under the then T.I. 27(b). In the appeal filed by the Collector, the issue for determination is whether the Collector (Appeals) was right in holding that there was no suppression and therefore, invocation of longer period under the proviso to Section 11A of the CESA, 1944 was wrong.
13. Taking the first issue, we find that the ld. Counsel for M/s. Dak Alloys raised certain contentions; that the intermediate product was a flattened wire rod and was not goods. He also referred to the decision of the Tribunal that flattened wire rods produced by redrawing through dies were not classifiable as strips. He also referred to ISI Glossary of Terms saying that the intermediate product was a strip. As against this, the department has pleaded that their case was fully covered by the decision of the Hon’ble Supreme Court. On careful consideration of the ruling of the Apex Court, we find that the issue has been discussed at length after bringing out the facts of the case by the Hon’ble Supreme Court. The facts before us are identical to the facts of the case decided by the Apex Court. We therefore, respectfully following the rulings of the Apex Court, hold that the bare aluminium strips even though insulated fall within the manufacture of aluminium and shall be classifiable under T.I. 27(b). We also hold that the T.I. 68 speaks of goods which are not elsewhere specified in the Schedule is consequently inapplicable.
13A. On the question of limitation, we find that the Collector (Appeals) has referred to the letter dated 4-4-1983 issued by the Superintendent, Central Excise. On perusal of this letter, we find that the Superintendent has written “You are a manufacturer of electrical cables and aluminium strips falling under Central Excise Tariff Item Nos. 33B and 68. The Collector in his grounds of appeal has stated that they did not mention ‘bare aluminium strips’ in their declaration. The question for determination is whether the department was aware that the assessee was manufacturing bare aluminium strips or not. We have referred to the letter dated 4-4-1983, written by the Suprintendent to the assessee reading of the sentences quoted above leaves no room for a doubt and makes it very clear that the department was aware on 4-4-1983 that the assessee was manufacturing aluminium strips. Thus, the allegation of suppression is not proved. Moreover, from the letter dated 4-4-1983, we are of the view that the department was not certain whether the bare aluminium strips will be classifiable under T.I. 27(b) or elsewhere. In that letter though there is a mention of aluminium strip yet T.I. 27(b) is not mentioned anywhere. Having regard to these facts and also the facts that the bare aluminium strips were the intermediate product, there was no question of its remaining undeclared does not arise more so when the final product was also DPC Aluminium Strips. Having regard to these facts, we hold that the charge of suppression or misstatement is not established and therefore, extension beyond six months by invoking the proviso to Section 11A will not be sustainable in the instant case.
On this issue, we therefore, agree with the findings of the Collector (Appeals).
14. Having regard to the above findings, we reject both the appeals.