ORDER
Lajja Ram, Member (T)
1. In this appeal filed by the Revenue, the matter relates to the excisabililty of the steel crushing rings used in a Cement Mill. The respondents M/s. Sayaji Iron & Engineering Co. Pvt. Ltd. had shown the goods as non-excisable. A Show Cause notice was issued on 23-12-1987 and a duty demand for Rs. 13,291.69 was made on the ground that the steel crushing rings were excisable and dutiable. The Asstt. Collector of Central Excise who adjudicated the matter, observed that the goods purchased by the respondents from M/s. Steelcast Bhavnagar Pvt. Ltd. were steel castings and the price ranged from Rs. 1400/- to Rs. 1580/- per piece. The goods supplied to their customers M/s. Orissa Cement Ltd. was the steel crushing rings and value charged was Rs. 6,175/- and Rs. 4,225/- per piece. He held that the rings were manufactured as per the specific design/drawing of the customers and as the assessee had manufactured a new and distinct product, it could not be said that only bought out items had been resold. He confirmed the demand of Rs. 13,291.69. On appeal, the Collector of Central Excise (Appeals) observed that the assessee had brought bought out items and had not further worked thereon. He further observed that the Department had not established that the assessee had further worked on the duty paid items.
2. The Respondents had prayed for decision on merits.
3. We have heard Shri Jagdish Singh, ld. JDR and have gone through the facts on records. We find that what the assessee had purchased from M/s. Steelcast Bhavnagar Pvt. Ltd. were described as steel castings and what they had supplied to M/s. Orissa Cement Ltd., were Manganese Steel Crushing Rings. In the Cross-Objections filed by them, they themselves had argued that even though the complete steel crushing ring was manufactured, the goods were cleared only as ‘steel castings’. We consider that it is not as what nomenclature had been given to the product which is relevant for classification but it is the actual nature of the goods and the process to which the goods received for processing had been subjected to which is relevant.
4. We also find that the steel castings were received at a price of Rs. 1,400/- to Rs. 1580/- per piece and had been supplied at a considerable higher price of Rs. 6,175/- and Rs. 4,225/- per piece. The Respondents had pleaded in this regard as under :
“As regards difference in purchase and sale price, it was already stated that the crushing rings are manufactured according to the specification and design to suit the machineries manufactured by us and they are not available in the open market. If the buyer get these crushed rings manufactured by themselves, it may even cost more. It is generally a trade practice to earn more profit on such specialized parts. This would never mean that certain process is done in the factory.”
The Respondents have themselves agreed that the goods supplied were specialized parts and it is also not disputed that the goods have been cleared as the steel castings. Thus, the assessee had misdeclared the goods as cleared. The argument that the goods were not non-excisable is not supported by the facts on records.
5. Keeping in view the nature of the goods and the product description, we do not agree with the view taken by the ld. Collector of Central Excise (Appeals). We set aside the impugned Order-in-Appeal and restore the Order-in-Original.
6. As a result, the Appeal filed by the Revenue is allowed.