Collector of Central Excise Vs. Sri Balaji Cable Industries - Court Judgment

Excerpt:
1. the captioned revision show cause notice issued by the central government under the then section 36(2) of central excises and salt act, 1944 is, on transfer of the proceedings to this tribunal, now before us for disposal as if it were an appeal filed by the department.2. the respondents are riot represented before us today despite notice issued to them by registered post on 10-9-1986. however, we have perused their written reply to the central government's show cause notice, heard the learned representative of the department, examined the record and considered the matter carefully, since a common issue is involved in these five appeals, we make this combined order to dispose of all of them.3. the facts, in brief are, that the respondents purchase aluminium rods which have borne central excise duty under item 27(a) of the central excise tariff. from these rods, they first draw aluminium wire of 10 swg or less and then manufacture therefrom all aluminium conductors (aac) and aluminium conductors steel reinforced (acsr). they pay duty on clearance of their final product - aac and acsr conductors -under the residuary sub-item (ii) of item 33b of the tariff which reads as under :- "33b - electric wires and cables, all sorts, not otherwise specified.the department's case, in short, is that aluminium wires of 10 swg or less and aac/acsr conductors made therefrom are two different products, though both are electric wires and cables and both fall under the same tariff sub-item 33b (ii) and, therefore, there should be a two-stage duty - first on aluminium wires and then on conductors. on that basis, the assistant collector confirmed five demands for differential duty against the respondents covering the period from 15-11-1977 to 31-1-1981. in appeal, the appellate collector, relying on the division bench judgment dated 20-8-1970 of the bombay high court 1977 e.l.t. j34 - empire dyeing and manufacturing co. ltd., v. v.p. bhide], set aside the demands. thereupon, the central government issued the captioned show cause notice proposing to set aside the appellate order and restore the assistant collector's orders.4. the learned representative of the department relied on this tribunal's order no. 156-160/86-b.1, dated 11-3-1986 - collector of central excise v. ranka cables in support of his plea that aluminium wires of 10 swg or less were classifiable under item 33b (ii). we asked him whether there was any material on record to show that aluminium wires captively used by the respondents at an intermediate stage of their production were in a fit condition for use as electric wires and cables. he said there was none. however, we do not consider that it should be necessary to remand the matter to get a' finding on this question of fact first. even assuming that aluminium wires of the respondents 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 338 and since admittedly both aluminium wires and conductors fell under the same tariff sub-item 33b (ii) "all others", the department cannot collect and retain full duty twice under the said sub-item; the duty collected at the wire stage should have to be deducted from the duty payable on the conductors through the mechanism of rule 56a, vide the supreme court full bench judgment in the case m/s. empire industries ltd. and ors. v. u.o.i. and ors. 1985 (20) e.l.t. 179 (sc) paragraphs 47 and 49. if that is done, the net duty that would be chargeable would be equal to the duty leviable on conductors which the respondents have already paid. there is no warrant in law for asking them to pay the duty on wires also in addition without giving them proforma credit of the wire duty. nothing more is, therefore, payable by the respondents.5. in the light of our above discussion, we dismiss all the five appeals and discharge the show cause notice issued by the central government.

Judgment:
1. The captioned revision show cause notice issued by the Central Government under the then Section 36(2) of Central Excises and Salt Act, 1944 is, on transfer of the proceedings to this Tribunal, now before us for disposal as if it were an appeal filed by the department.

2. The respondents are riot represented before us today despite notice issued to them by registered post on 10-9-1986. However, we have perused their written reply to the Central Government's show cause notice, heard the learned representative of the department, examined the record and considered the matter carefully, since a common issue is involved in these five appeals, we make this combined order to dispose of all of them.

3. The facts, in brief are, that the respondents purchase aluminium rods which have borne Central Excise duty under Item 27(a) of the Central Excise Tariff. From these rods, they first draw aluminium wire of 10 SWG or less and then manufacture therefrom All Aluminium Conductors (AAC) and Aluminium Conductors Steel Reinforced (ACSR). They pay duty on clearance of their final product - AAC and ACSR Conductors -under the residuary Sub-item (ii) of Item 33B of the tariff which reads as under :- "33B - Electric Wires and Cables, all sorts, not otherwise specified.

The department's case, in short, is that aluminium wires of 10 SWG or less and AAC/ACSR Conductors made therefrom are two different products, though both are electric wires and cables and both fall under the same tariff Sub-item 33B (ii) and, therefore, there should be a two-stage duty - first on aluminium wires and then on Conductors. On that basis, the Assistant Collector confirmed five demands for differential duty against the respondents covering the period from 15-11-1977 to 31-1-1981. In appeal, the Appellate Collector, relying on the Division Bench judgment dated 20-8-1970 of the Bombay High Court 1977 E.L.T. J34 - Empire Dyeing and Manufacturing Co. Ltd., v. V.P. Bhide], set aside the demands. Thereupon, the Central Government issued the captioned show cause notice proposing to set aside the appellate order and restore the Assistant Collector's orders.

4. The learned representative of the department relied on this Tribunal's Order No. 156-160/86-B.1, dated 11-3-1986 - Collector of Central Excise v. Ranka Cables in support of his plea that aluminium wires of 10 SWG or less were classifiable under Item 33B (ii). We asked him whether there was any material on record to show that aluminium wires captively used by the respondents at an intermediate stage of their production were in a fit condition for use as electric wires and cables. He said there was none. However, we do not consider that it should be necessary to remand the matter to get a' finding on this question of fact first. Even assuming that aluminium wires of the respondents 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 338 and since admittedly both aluminium wires and conductors fell under the same tariff Sub-item 33B (ii) "All others", the department cannot collect and retain full duty twice under the said sub-item; the duty collected at the wire stage should have to be deducted from the duty payable on the conductors through the mechanism of Rule 56A, vide the Supreme Court Full Bench judgment in the case M/s. Empire Industries Ltd. and Ors. v. U.O.I. and Ors. 1985 (20) E.L.T. 179 (SC) Paragraphs 47 and 49. If that is done, the net duty that would be chargeable would be equal to the duty leviable on conductors which the respondents have already paid. There is no warrant in law for asking them to pay the duty on wires also in addition without giving them proforma credit of the wire duty. Nothing more is, therefore, payable by the respondents.

5. In the light of our above discussion, we dismiss all the five appeals and discharge the show cause notice issued by the Central Government.