ORDER
Chittaranjan Satapathy, Member (T)
1. Heard both sides. The brief facts of the case as stated by the appellants are as follows:
Automobile Corporation of Goa Limited., (hereinafter referred as to the appellants) have two manufacturing units situated in Goa. In one unit the appellants is engaged in the manufacture of parts and accessories of motor vehicles and the same is referred to as Sheet Metal Division (for short SMD). SMD is also engaged in the activity of cutting, punching, bending, forming etc. of sheet metal supplied to it. In the other unit, the appellants are inter alia engaged in the activity of building Bodies on the chassis supplied by others. This unit is called Bus Body Division (for short BBD). Both the aforesaid units namely SMD and BBD are separately registered under Central Excise Act. The appellants from BBD send sheet metal and other material to SMD for the purpose of carrying out certain processes like cutting, punching, bending, forming etc. on the sheet metal. In SMD the appellants undertake these activities on the sheet metal and had been clearing the crude sheet metal after cutting, bending and forming to BBD wherein they are used ultimately in building of bodies on the chassis supplied by others. During the period from 1-3-93 onwards, the body building activity was exempt from the whole of the duty of excise. During this period no duty was paid on the sheet metal subjected to the aforesaid processes of cutting, punching, bending, forming etc. at SMD. During the period from October 1993 to February 1994, the appellants were issued with four show cause notices proposing to demand duty on such sheet metal subjected to the process of punching, bending, forming, etc. at SMD and cleared to BBD. The appellants contended that the aforesaid process carried out on sheet metal would not amount to process of manufacture and also that sheet metal after subjecting to the aforesaid process were coming out in crude and unfinished form and were not capable of being marketed or bought and sold as goods and therefore not liable to duty. By Order-in-original dated 31-3-1995 the demand was confirmed and by Order-in-appeal dated 21-1-1997, the matter was remanded to the original authority to decide the issue on marketability of the item in question. On remand the Deputy Commissioner who visited SMD on 24-9-1997. passed the Order-in-original dated 16-1-1998 holding that these items are not marketable and therefore not liable to duty. Accordingly, the demand was raised in the four show cause notices were dropped. On review of the aforesaid Order of the lower authority, the Commissioner (Appeals) allowed the appeal filed by the department on the ground that the items in question had use in building of bodies on chassis and they are therefore marketable. Aggrieved by the aforesaid Order-in-appeal dated 16-9-2000 passed by the Commissioner (Appeals), the appellants filed an appeal before the Tribunal. The Tribunal vide Final Order dated 19-5-2001 set aside the aforesaid Order-in-appeal and remanded the matter to the adjudicating authority.
2. The present appeal arises out of the remand proceedings under which both the original authority and the lower appellate authority have decided against the appellants. It has been argued on behalf of the appellants that during remand proceedings, the original authority had deputed the Range Superintendent for physical verification of the disputed items and the report of the Range Superintendent dt. 21-1-2001 categorically stated that the impugned items were neither fully manufactured nor marketable but this report has not been taken into consideration by the original authority. It is the plea of the appellants that the impugned goods are crude and unfinished arising out of sheet metal subjected to simple operations like punching, bonding, cutting etc. These are also made to particular specification and are not standard items sold in the market.
3. After carefully considering all aspects of the case, we are of the view that there is merit in the contention of the appellants that the impugned goods do not meet the tests of manufacture and marketability. There is also no evidence brought on record by the department to show that these items are marketable or are marketed. Hence, we set aside the impugned order and allow the appeal with consequential benefit to the appellants.
(Pronounced in Court)