Full Judgment Text
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 3
PETITIONER:
M/S. EASTERN DIECASTING INDUSTRY PVT. LTD.
Vs.
RESPONDENT:
THE COLLECTOR OF CENTRAL EXCISE, CALCUTTA
DATE OF JUDGMENT: 27/08/1997
BENCH:
SUHAS C. SEN, K. T. THOMAS
ACT:
HEADNOTE:
JUDGMENT:
J U D G E M E N T
SEN, J.
The facts of this case have been summarised by Customs,
Excise & Gold (Control) Appellate Tribunal (CEGAT). The
appellant-company manufactures railway overhead equipment
and fitting for electric traction falling under Item 68 of
the Central Excise Tariff. According to the Department, the
Central Excise Officers visited their factory on 1.8.1983 on
the basis of intelligence report that the appellants are
manufacturing railway overhead equipment and fittings and
were removing the same without payment of duty and demanded
the records and documents relating to the manufacture, terms
and conditions of supplying the material to the railways.
Shri Milan Pakhira, Director of the Company gave a statement
on that day saying inter alia that they were supplying
overhead equipment and fittings for electric traction out of
raw material purchased from outside and the goods were
directly supplied to the railways. The Company under took
fabrication of such fittings for railway electrification
contractors on charging them fabrication charges where the
contractors themselves supply the raw material. He also said
the process under taken by them was melting of copper
aluminium and tin and the molten metal was cast in to moulds
as per railway specification and that the material after
casting was further subjected to operations such as
fettling, grinding, dressing, machining, assembling wherever
necessary with fasteners. The Department, thereafter,
ascertained the value of clearances of these goods for the
past period 1979-80 to 1982-83 in the light of Notification
No. 89/79 dated 1.3.1979 and Notification no. 105/80 dated
19.6.1980 which granted exemption to such articles upto Rs.
30 lakhs in the current financial year if the value of
clearances during the preceding financial year did not
exceed Rs. 30 lakhs. it was found that on this basis, there
had been less than Rs. 30 lakhs clearances in 1980-81 and
that the clearance during 1981-82 was Rs.41,64,574.43p.
making for liability to pay duty on the amount in excess of
Rs. 30 lakhs and also that their clearances of value of Rs.
42,06,178/- during 1982-83 had to pay duty without any
exemption as the clearances during preceding financial year
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 3
1981-82 had exceeded Rs. 30 lakhs. A show cause notice was
accordingly issued on 2.12.1986 and after considering their
reply thereto and hearing them in the matter, the collector
of Central Excise, Calcutta upheld the demand of duty in the
sum of Rs. 4,29,660.2.p. and also imposed penalty in the sum
of Rupees one Lakh Under rule 1730 of Central Excise Rules,
1944.
The appellant-company went up in appeal to the
Tribunal. The Tribunal upheld the order of the Collector but
insofar as the quantum of demand was concerned while
agreeing with the contention of the appellant-Company
regarding double computation of value of raw materials,
asked the Collector to verify this factual aspect on the
basis of evidence to be produced by the appellant and,
thereafter, decide whether the duty demanded would need
modification. The Appellate Tribunal also reduced the
quantum of penalty to Rs.25,000/-.
At the material time, Tariff Items 26A (1a), 27 (a)
(ii) and 68 stood as under:
"26A. COPPER AND COPPER ALLOYS
CONTAINING NOT LESS THAN FIFTY CENT
BY WEIGHT OF WEIGHT OF COPPER.
(1) x x x x
(1a) Wire bars, wire rods and
castings, not otherwise specified.
27. ALUMINIUM -
(a)(i) x x x x
(ii) wire bars, wire rods and
castings, not Otherwise specified.
68. ALL OTHER GOODS, NOT ELSEWHERE
SPECIFIED, BUT EXCLUDING -
...................................
......................."
On behalf of the appellant - Company, it has been
argued that castings made out of aluminium and copper argued
that castings made out of aluminium and copper remain
castings even after they received the same from the railways
and returned it to them. What was received from the railways
was casting in from. What is returned is casting converted
into an identifiable shape. It was contended that the
process undertaken by the appellant was to melt copper,
aluminium and tin according to melt copper, aluminium and
tin according to the specification of the railway. Melted
metal was cast into moulds and the material after casting
was sold to the railway. Reliance was placed on behalf of
the appellant on a decision of this Court in Vasantham
Foundry v. Union of India and Other, (1995) 5 SCC 289 where
it was held that iron castings in its solid form must be
treated as "cast iron" for the purpose of Section 14 (iv) of
the Central Sales Tax Act. It was further held that "cast
iron casting" in its basic or rough form must be held to be
"cast iron". But if thereafter any machining or polishing or
any other process was done to the rough cast iron casting to
produce something else, these could not be treated as cast
iron castings in its primary or rough form.
In the instant case, the finding of fact is that the
appellant after casting was done, carried out various post-
casting operations such as fettling, grinding, dressing,
machining and assembling with fasteners. This finding is
corroborated by the statement of the Director of the
Company, On these facts, the CEGAT dismissed the appeal of
the appellant could not be classified as "castings" and,
therefore, had to be taxed under Tariff Item 68.
The findings made by the Tribunal are essentially
findings of fact. of fact. They are based on evidence and
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 3
cannot be regarded as perverse. In that view of the matter,
the appeal is dismissed. There will be no order as to costs.