Full Judgment
Similarly, appeal No. 756/85-B1 is also against a common Order No. 270 to 272/84 (H) passed by the Collector (Appeals) in respect of three appeals. Accordingly, the department has filed two supplementary, appeals No. E/1790 & 1791/91-Bl alongwith applications for condonation of delay. The original appeal No. 756/85-B1 being in time, the delay in filing these supplementary, appeals is also condoned.
2. In these five appeals the same issues have been raised. They are, therefore, disposed of by this common order.
3. Briefly stated the facts of these cases are that the respondents manufacture aluminium conductors called all aluminium conductors (AAC) or aluminium conductors steel reinforced (ACSR). All aluminium conductor is generally a bunch of seven or more base aluminium wires gauge/size having cross-section diameter ranging from 1.55 mm to 4.72 mm. The ACSR conductor is essentially an ACC conductor except that it is reinforced with a steel wire for imparting strength to the conductors.
4. Bare wires were produced by the respondents from duty paid aluminium wire rods received from other manufacturers. The duty paid wire rods were subjected to drawing through dies to produce wires of both less and over 10 SWG. The wires were stranded after being wound on bobbins to form ACC. In the case of ACSR a steel wire was used as a support for the twisted strands of aluminium wire. The respondents did not sell bare aluminium wires which emerged as an intermediate product in the manufacture of aluminium conductors which were cleared on payment of excise duty for sale to various Electricity Boards. The department was of the view that bare aluminium wires being covered by Tariff Item 33B covering "Electric wires, all sorts" were liable to duty under sub-item (ii) of Item 33B, as 'all other electric wires and cables' other than wires and cables mentioned in sub-item (i). A number of demands issued for the recovery of duties on bare aluminium wire produced during different periods prior to 9-7-83 were confirmed by the Asstt.
Collector. In the appeals filed by the respondents the Collector (Appeals) set aside the order of the Asstt. Collector on the grounds that subjecting both aluminium wires and conductors to duty would amount to double taxation since both items used for carrying current were classifiable under Tariff Item 33B(ii) and stranding of aluminium wires into conductors did not result in emergence of a new product having distinctive character and use.
5. On behalf of the department we heard the learned JDR Shri M.S.Arora. Reiterating the submissions made in the memorandum of appeal, he contended that conversion of aluminium wires into aluminium conductors results in the manufacture of a new item within the meaning of Section 2(f) of the Central Excises and Salt Act, 1944. He contended that notwithstanding the fact that the conductors were cleared on payment of Central Excise duty, the wires when cleared for captive consumption for conversion into conductors were also chargeable to duty. He stated that the benefit of Notification No. 187/83 dated 9-7-1983 was not available to the manufacturers since the demands in question related to the period prior to 9-7-1983.
6. On behalf of the respondents the learned advocate Shri V.J. Sankaran claimed that in a number of decisions of the Tribunal it had been held that levy of duty on both aluminium wires and conductors produced simply by stranding such wires classifiable under Item 33B(ii) of the Central Excise Tariff was not permissible as that would amount to double taxation. In this regard he placed reliance on the Tribunal's decisions in CCE, Hyderabad v. Shri Balaji Cable Industries, Anantapur [1987 (29) ELT 77 (Tri.)] and Asstt. Collector of Central Excise, Anantapur v. Ranka Cables (Pvt) Ltd., Cuddapah (Order No. 156-160/86-B1 dated 11-3-1986).
7. We have considered the submissions made on behalf of both the sides and examined the relevant records. It is seen that in this case the main points that arise for consideration are: - (i) Whether conversion of aluminium wires into aluminium conductors results in the manufacture of a new product within the meaning of Section 2(f) of the Central Excises and Salt Act, 1944, and (ii) Whether aluminium wires when cleared for captive consumption for the manufacture of conductors were chargeable to duty.
(iii) Whether the benefit of Notification No. 187/83 dated 9-7-1983 was not admissible in respect of demands for recovery of duty on aluminium wires cleared for captive consumption prior to 9-7-1983.
8. We find that these points are fully covered by the Tribunal's decision in the case of Asstt. Collector of Central Excise, Anantapur v. Ranka Cables (Pvt.) Ltd. Cuddapah (Order No. 156-160/86-B1 dated 11-3-1986). The relevant extracts from this decision are reproduced below: "The appeal docs not say how the cables are assessed. The Appellate Collector held they were assessed under Item 33B(ii). This is the same sub-item under which the department wants to assess the bare wires. It is evident that the wire whether in the conductor or singly is sought to be taxed twice with the same duty, 33B(ii). This is not lawful. It may even be true as a new product distinct from the wire. But since the duty the department wants to exact is the same one, under the same head, 33B(ii), it cannot do so. If the two products are covered by the same heading and pay the same duty, no amount of manufacture or change will attract the same duty again.
It appears duty has been recovered on the conductor under Item 33B(ii). Therefore, the same duty cannot be exacted again, on the wire which went into the conductor. And the department has done rather well. It can take the same duty only once and it did so at the most favourable point, the conductor point, when the value had gone up by reason of the stranding etc. etc, that product the cable conductor. Had it taken duty at the wire point, it would have collected duty on a lower value, and once it had done so would have disqualified itself from collecting the same duty, 33B(ii), once again on the cable conductor made of wire which had already paid that very same 33B(ii) duty.
Reference has been made to Rule 9 and Rule 49. In the view taken by us further discussion on this aspect becomes redundant."Collector of Central Excise, Hyderabad v. Shri Balaji Cable Inds. Anantapur [1987 (29) ELT 77 (Tri)] the Tribunal had arrived at a similar finding. In that case even when the demands for recovery of duty on the intermediate product pertained to the period prior to the issue of Notification No. 187/83 dated 9-7-1983 on the ratio of the decision of the Supreme Court in the case of Empire Industries Ltd, and others v. U.O.I. 1985 (20) ELT 179 (SC) it was held that even if it was assumed that aluminium wires were by themselves a finished item of electric wires and cables and they were a distinct product from AAC and ACSR conductors, since the proforma credit procedure under Rule 56A applied to Item 33B and admittedly both aluminium wires and conductors fell under the same Tariff sub-item 33B(ii) 'All others' it was not permissible for the department to collect and retain the full duty twice under the same sub-item. On the ratio of these decisions it has to be held that duty having been recovered at the final stage on aluminium conductors manufactured by the respondents, no duty was recoverable on aluminium wires manufactured and removed for captive consumption for the manufacture of conductors.