Full Judgment
2. Learned Senior Departmental Representative appearing for Revenue submits that from 1-3-1993 due to budgetary changes the rate of duty was reduced from 20% to 5% on the goods falling under Tariff sub-heading 8504.00. The respondents were manufacturing electric lamination falling under 8312.00 alongwith other products. On 15-3-1993, respondents filed fresh classification list declaring the production of transformer cores falling under 8504.00 of the Tariff. He submits that thereafter respondents started clearing their electrical laminations which are liable for duty @ 20% declaring as transformer cores which were liable to duty @ 5%. He further submits that prior to 1-3-1993 there was not a single sale of transformer core by the respondent, whereas during the period 1-3-1993 to 31-12-1993 respondents sold transformer cores to the tune of Rs. 3,98,56,879/- representing 77% of their total sale. Before this period the 85% of the total sale was of electrical laminations.
3. He further submits that on 4-11-1993, the factory of the respondents was visited by the officials of the Excise Department and statement of Shri Manoj Kumar was recorded and who in his statement admitted the fact that the respondents were clearing electric lamination and declaring it as transformer cores. At the time of visit, it was found that Transformer core was nothing but electrical laminations which were arranged in some sets and put between two wooden frames. He submits this shows that respondents were clearing stampings only. He also submits that rate and mode of selling the transformer cores was the same as of electrical laminations. He, therefore, prays that their appeal be allowed.
4. Learned Counsel for the respondents submits that the Revenue is relying heavily on the statement of Shri Manoj Kumar who was working as Steno-typist with respondents. He was not qualified to describe the difference between cores and laminations. His job was confined to invoices/gate passes and he was not concerned with any other excise work.
5. He further submits that respondents produced two expert witnesses namely Shri Arjun Singh Executive Engineer, U.P. State Electricity Board and Shri N. Ramaswamy, Chief Technical Director, East India Udyog who is an eminent Engineer in the transformer technology. He sumbits that both the witnesses were cross-examined and in their evidence, they both submitted that electrical laminations and transformer cores are two different goods and Electrical lamination arranged in a systematic way creates cores.
6. He, further, submits that it is not the case of the Revenue that laminations and cores are one and the same thing. The appellant cleared only transformer cores as per orders placed by their customers. He, therefore, prays that appeal be dismissed.
8. The contention of the Revenue is that respondents cleared electrical lamination which is liable for higher rate of duty declaring it as transformer cores which are liable for lower rate of duty. The adjudicating authority examined the orders placed on the respondents by their customers and held that all the orders were for the supply of only transformer cores and the Revenue has not made any investigation from the customers regarding the use to the goods cleared by the respondents. Further, Revenue was relying on the statement of Shri Manoj Kumar who was working as Steno-typist with the respondents.
Therefore, he cannot be held to be an expert witness to describe the difference between lamination and core.
9. The respondents also produced two expert witnesses who were also cross-examined. In their statement both of them stated that lamination and cores are two different goods and if the cores are arranged in a systematic way by inter-leaving them with each other and, thereafter, tightened with wooden or steel frames by use of nuts and bolts, these laminations becomes cores. We find from the Panchnama prepared at the time of visit by officials, the laminations were found to be arranged in the form of sets by putting one piece above other and are put between two wooden frames and also clamped by nuts and bolts on every corner.
10. The expert witnesses produced by respondents also stated that these cores were used in the manufacture of transformers as such.
11. The Revenue has not got examined the goods taken into possession at the time of visit by any expert to get his opinion regarding the description of the goods.
12. In view of above discussions, we find no merit in the appeal and the same is dismissed.