Full Judgment
3. The contention of the appellants is that the conversion of round bars into bright bars does not amount to manufacture. Appellants relied upon the decision of the hon'ble Supreme Court in the case of Vee Kayan Industries v. C.C.E. reported in 1996 (83) E.L.T. 262 (S.C.). The contention of the appellants is also that in view of the above decision of the Hon'ble Supreme Court, the order passed by the Commissioner (Appeals) is not sustainable.
4. The contention of the revenue is that heading 7214 of Central Excise Tariff covers other bars and rods or non-alloys steel, which are not further worked than forged, hot-rolled, not drawn but including those twisted after rolling. Heading 7215 of the Central Excise Tariff covers other bars and rods of iron or non-alloy steel. M.S. round bars, which is the raw-material for manufacture of bright bars, is classifiable under heading 7214 of Central Excise Tariff and after conversion of M.S. round bars into bright bars, are classifiable under heading 7215.90 of Central Excise Tariff.
5. We find that the issue is whether the conversion of M.S. round bars into bright bars amounts to manufacture as considered by the Hon'ble Supreme Court in the case of Vee Kayan Industries (supra). The Hon'ble Supreme Court in this case held as under : "But the submission that bright bars and bright scrap could not be subjected to levy appears, in the facts and circumstances of the case, to be well founded. The Tribunal found that the appellant had purchased duty-paid round bars from the market and these bars were drawn through a slight narrow diameter and the bright bars emerged from the narrow die. It was not disputed before the Tribunal nor it is disputed in this Court that Tariff Entry 26AA(ia) levies duty on bars. The Tribunal held that passing of the round bars through slight narrow diameter resulted in change of form and shape and since this transformation of round bars into bright bars resulted in bringing out a distinct and different commodity, the appellant was liable to pay duty on it. This finding does not appear to be correct in law as in absence of any material on record or any finding by the Tribunal that mere drawing of a round bar through a slight narrow diameter resulted in bringing out a new commodity, the finding that it changed in form or shape without any evidence cannot be accepted.
In the absence of any material to show that in commercial circle the bars and bright bars are different, the inference drawn by the Tribunal cannot be upheld." 6. In view of the above decision of the Hon'ble Supreme Court, the impugned order is not sustainable, hence set aside. The appeal is allowed.