1. These are two appeals filed by M/s. Tata Telecom Ltd., Palghat against the impugned Order (Order-in-Appeal Nos. 31/2000 CE & 32/2000 CE) dated 22.6.2000 passed by the Commissioner of Central Excise & Customs (appeals). Facts of the case in brief are that the appellants are engaged in the manufacture of telephones. Along with their phones they are supplying one number of Telephone Junction Box, technically called 'Modular Terminal Roset (MTR) in general and two numbers with their 1+1 telephone. These are manufactured at the Job-worker's premises out of parts purchased and supplied to them by the appellants.
The adjudicating authority in the subject two Orders-in-Original had held that- (i) the assembling of MTR from the various components amounts to manufacture, which are classifiable under Central Excise Tariff Heading No.8535.90, (ii) the appellants who supplied the raw material are the manufacturer since the appellant during certain period and availed Modvat credit, though subsequently reversed the credit in March '96 and the inputs were moved under procedure prescribed under Rule 57F(3).
Accordingly duty was demanded for the period from June'94 to September'96 invoking the extended period under Section 11A of the Central Excise Act, 1944.
2. On an appeal filed by the assessee the Commissioner (Appeals) held that the assembling of 'MTR' amounts to manufacture. He has given a categorical finding on this point as can be seen from para 7 of the impugned order which is as under:- "07. As regards the first point, the contention of the assessee as mentioned in para 5(iiii) is not acceptable as the assembly of MTR out of the part involves fixing the female jack in the plastic base and the n connecting it with two terminals where the incoming telephone lines are to be connected and fixing a cover on it, make the components to form a different commodity - a telephone junction box or a telephone connector- having different use and characteristics other than the parts comprising of it. Though the bare female jack is the vital component, a functional MTR(connector) as a functional/operational product come into existance only after assembling of all the components in the specially designed moduled plastic cover and testing. As per Section Note No.6 of Section XVI of Central Excise Tariff Act, the assembling of MTR amounts to manufacture for the purpose of classification and payment of duty".
3. Arguing for the appellants Shri Aravind P. Datar, learned Senior Advocate submitted that mainly three points are to be considered in these appeals (1) Whether the assembling of 'MTR' amounts to manufacture, (ii) assuming that the activity undertaken by the appellants amounts to manufacture and whether the appellant (supplier of raw material) is the manufacturer against the independent job-worker who has undertaken the activity, and (iii) whether the department was justified in invoking the larger period.
4. On the first point, he said that female jack imported by the appellants is having all essential characteristics and putting a plastic cover does not amount to manufacturer. He submits that it is settled position that name use and characteristics are the criteria in deciding an issue whether new product has come into existance. He said that though the first was satisfied still the item can be used and does not lose its characteristics and accordingly assembling of MTR does not amount to manufacture.
5. On hearing both sides on the first issue and on going through the categorical finding in para 7 of the impugned order, we do not find any infirmity on the issue. In the case of Laminated Packings Pvt. Ltd., reported in 1990(49) ELT 326, it is clearly held that goods belong to the same entry, is not relevant because if the goods belong to the same entry, the goods are different identifiable goods known as such in the market. If that is so the manufacture occurs and manufacture takes place, it is dutiable. In the instant case the female jack is converted into MTR and accordingly we confirm the view taken by the Commissioner (Appeals) that it amounts to manufacture. Accordingly the appellants fail on this issue.
6. As can be seen from the impugned order, we find that Commissioner has held that job-worker is a manufacturer. Since the party has been Modvat credit on the inputs and under Rule 25F(2) removed the inputs for further processing, he shifted the liability on the appellant. He also permitted them to take Modvat credit after determining the assessable value.
"13. In view of the discussions made in para 8 to 12 above, it will be appropriate if the case if referred back to the Original Authority for deciding afresh. Accordingly the Order-in-Original No.139/97 dated 25.4.97 and 141/97 dated 25.4.97 are nullified and the case is referred back to the Original Authority for deciding afresh in light of the observation made by me in preceeding paras and with reference to factual position and case laws on the subject after giving an opportunity of personal hearing to the appellant.
The appellant is directed to raise all the pleas made in the appeal before the Original Authority who will decide the case afresh".
8. Shri Datar, Senior Counsel submits that there is no clear finding in para 13 whether it is for denovo consideration or only on some points.
On going through the para 13 of the impugned order, we do not find any ambiguity therein except on the point at issue of manufacture, on other points he has remanded the matter. We make it clear that it is an open remand for on all issues except on issue of manufacture. There is also some force in the arguments advanced on behalf of the assessee that there is no clear finding by the Commissioner (Appeals) on the point of limitation. The Party is at liberty to take all the pleas including limitation point in the denovo proceedings. Thus, these two appeals are allowed by way of remand.