Full Judgment
2. Learned advocate, Shri P.V. Sheth for the appellants has urged that the steel forgings manufactured by them are covered under Tariff Heading 7208. It has been submitted that the forgings manufactured by them had been subjected to processes upto and including the stage of proof machining whereby such forgings were only smoothened and made ready for final machining to shape them into machine parts. No machining of such forgings has been undertaken by the appellants. This had been the plea before the adjudicating authority; instead of controverting this plea by any evidence on record, the adjudicating authority has confirmed the duty and penalty merely on the basis of admissions recorded by the department from Shri Manish D. Madeka, a partner of the said appellant firm who was looking after the Central Excise and other taxation matters. Adjudicating authority has found that the said Shri Manish D. Madeka in his statement dated 10-6-1989 had clearly admitted that they were manufacturing such goods without taking any Central Excise licence and that they were ready to pay duty on such goods manufactured by them. It is also recorded in para 24.08 of the impugned order by the adjudicating authority that the appellants have already paid an amount of Rs. 87,563.93 in respect of clearance of goods effected by them during the period April 1987 to March 1988.
Therefore, the subsequent stand taken by the appellant firm in reply to the show cause notice issued to them has been treated by the adjudicating authority as an afterthought without any basis and evidence on record. Learned advocate has submitted that the aforesaid finding is illegal. The Tribunal has held in a series of judgments e.g.
in final Order No. E/232 to 242/93-B1, dated 23-8-1993 in the cases of Aravali Forgings and Ors. v. CCE and H.J. Industries v. CCE - 1994 (70) E.L.T. 693 (Tri,) as well as another decision reported in 51 ECR 270 that forgings subjected to the processes specified in Board's circular F. No. 139/79/87-CX. IV, dated 4-6-1987 upto the stage of proof machining of such forgings would fall under Tariff Heading 7208. He submits that in view of these rulings of the Tribunal, the appeal deserves to be allowed and the impugned order deserves to be set aside.
3. Learned JDR, Shri K.K. Dutta, on the other hand while conceding to the aforesaid rulings of the Tribunal submits that in the instant case there is no clear finding by the adjudicating authority that the forgings under consideration have only been subjected to the processes upto proof machining only and that they have not been subjected to any further machining. The adjudicating authority, as rightly pointed out by the learned advocate for the appellants, has held against the appellants merely on the basis of admissions of one of the partners of the firm. In the absence of any finding regarding the processes undertaken by the appellants it cannot be said definitely whether the forgings under consideration would fall under Tariff Heading 72.08 or not. He, therefore, prays that the matter may be remanded to the adjudicating authority to decide the case do novo in the light of the Tribunal's rulings, mentioned supra.
4. In his rejoinder, learned Advocate, Shri Sheth submitted that although there is no clear finding of the adjudicating authority regarding the processes undertaken by the appellants on the forgings as they come out of the forging press never the less, the submissions made by the appellants before the said authority have not been rebutted. In the absence of any rebuttal of the pleas made by the appellants, they should be treated to be correct. He, therefore, prays for setting aside the impugned order and allowing the appeal.
5. We have carefully considered the pleas advanced from both sides. We are inclined to agree with the learned JDR that the matter requires to be remanded to the adjudicating authority in the absence of any findings to the effect that the products manufactured by the appellants are merely forgings and subjected to the processes mentioned in the aforesaid circular of the Board and that they have not been machined any further. Therefore, while setting aside the impugned order in so far as the appellants' firm is concerned, we allow the appeals by remand and direct the adjudicating authority to decide the case de novo in the light of Tribunal's judgments, mentioned supra. In other words, if the products are forgings and have not been subjected to any machining other than the processes, mentioned in Board's circular dated 4-6-1987, mentioned above, they should be classified under Tariff Heading 72.08 during the relevant .period under consideration. Duty liability, if any, be redetermined on the basis of the findings on the aforesaid question.