S.N. Variava, J. - (1.) ALL these Appeals can be disposed by this common Judgment as the point involved is the same.
(2.) BRIEFLY stated the facts are as follows: The Respondents are engaged in the manufacturing of zinc, lead and products thereof. Zinc is manufactured by a process known as electrolysis. In this process zinc sulphate solution is electrolyzed with the help of an electric current which is passed through it. The current is introduced into the solution by means of electrodes. A lead sheet fixed with a header acts as positive electrode (anode) and an aluminium sheet fixed with a header acts as negative electrode (cathode). For the purposes of electrolysis the Respondents manufacture the cathodes and anodes. The cathodes are manufactured in the following manner. Aluminium Header of the size of 1030 x 45 x 25 mm is welded with an Aluminium Sheet of the size 1105x610x5 mm. Thereafter, Copper Tips are welded on the Header for better conductivity. The last process is to weld Aluminium Hooks on Header for facilitating the lifting of Cathodes as and when desired. The Cathode is of specific size which consists of various parts namely, sheet, Header, Copper tips and Hooks and not merely of aluminium Sheet and Header. The anodes are manufactured by procuring lead ingots containing 1-02% silver. These ingots are melted and the molten is cast in the required size. The size of the cast/rolled product is 1070 x 1575 x 8 mm. A header is welded with the cast rolled plate. The header is manufactured by casting the copper bed in lead. In the lead cast/rolled product three holes are provided in which anode spacers are put for avoiding contact between anodes and cathodes. At this stage, it must be mentioned that the Respondents have a unit at Visakhapatnam. They also have a unit at Debari, Udaipur, Rajasthan. It is an admitted position that in respect of Debari unit the Respondents filed a Classification list showing the anodes and cathodes having headers. The Debari unit paid duty on the cathodes. However, in respect of Visakhapatnam unit the Respondents filed a Classification list merely showing anodes and cathodes without showing that they had put headers on them.
(3.) SHOW-cause-notices were issued to the Respondents as to why they should not pay duty on cathodes and anodes manufactured by them. The Commissioner of Customs and Central Excise held that there was a manufacture and directed payment of duty and also imposed a penalty. The Customs, Excise and Gold [Control] Appellate Tribunal (for short Tribunal), however, allowed the Appeal of the Respondents on the ground that there was no manufacture. It was held that the headers were attached only to facilitate the use of aluminium or lead sheet in the process of electrolysis. It was held that no new product with a distinct name, character and use has emerged. The Tribunal further held that these headers were not marketable. The Tribunal did not go into the contention, raised on behalf of the Respondents, that the manufacture, if any, was done by the job workers and that if duty was to be paid it would have to be paid by the job workers. We have already noted the manuiacturing process. The lead and aluminium sheets by themselves cannot and do not act as electrades. They become electrodes only after the : process mentioned above is undertaken. Thus the lead and aluminium sheets are converted into electrodes which is a new product known in the market with a distinct name, character and use. The Respondents pay duty on that product at the Debari unit as they accept that there has been manufacture. The Commissioner in his Order dated 31st March, 1997 has also noted that the product is bought in the market by one M/s. Cominico Binani Zinc Limited. This shows that the product is marketable. The Tribunal has failed to notice this. Even otherwise, it is settled law that for a product to be marketable there need not be actual purchase or sale. So long as a new and distinct commodity known in the market has come into existence there is manufacture. We are unable to accept the submission that the headers are attached merely to keep the lead and aluminium sheets emerged in the cell. From the process set out above it is clear that the headers are attached in order to see that the lead and aluminium sheets become positive and negative electrodes so that the current can pass through them. Without the headers it would not be possible to pass the current through the sheets.;