PAXMA AXLE AND SPRINGS P. LTD Vs. COLLECTOR OF CENTRAL EXCISE

JUDGEMENT

(1.) THE appeal is against the Order -in -Original No. 70/86 (C No. V(68) 15/44/CE/86/120, dated 14th January 1987 of the Collector of Central Excise, Delhi. The appellants are manufacturing elastic rail clips. The manufacturing process is, the duty paid rods are cut into pieces of required length and subjected to bending/forming process with the aid of Horizontal Power Press which gives U -shape to the steel rod pieces. The U -shaped Steel rod pieces are thereafter again put to Horizontal Power Press to give them another U -bend at different angles. The said pieces are then put into a vertical power press, which gives them the desired bending. In order to harden them and give them greater elasticity the said shaped steel rod pieces are subject to heat treatment in an electric furnace at a pre -determined temperature. These are tested and supplied to the railway department for use as elastic rail clips. The appellants claim the entire process as a forging process, falling under Item 25(11) of the erstwhile Central Excise Tariff and claim exemption under Notification 208/83, dated 1 -8 -1983. The Collector of Central Excise has not accepted the classification under T.1.25(11) and has reasoned as follows:

(2.) THE appellants claim classification under T.I. No. 26AA(la) as it was prior to 1 -8 -1983 treating them as forged shapes and sections and under T.I. 25(11) after 1 -8 -1983. They claim exemption under Notification 206/63 -CE, dated 30 -10 -1983 which remained in force till 31 -7 -1983 which exempts goods falling under Item No. 26AA (la) when made from another duty paid product covered under the same tariff. Thereafter under Notification No. 208/83, dated 01 August 1983, which exempted goods under T.I. 25(11) when produced out of bars and rods covered under Item No. 25(9). Since the Govt. of India had also exempted such units from licensing control under Notification No. 111/78, dated 09 -5 -1978, no licence was obtained.

(3.) SHRI P.S. Bedi, learned advocate in his submissions which reiterating the points raised in the appeal memorandum submitted that the process involved was only forging. The hardening and tampering does not alter the product. The appellants had written a letter dated 1 -12 -1980 to the Assistant Collector of the division about the product manufactured and there was no suppression as alleged in the Order. He also referred to the Order of Collector (A) Madras in an identical case, who had allowed the appeal for classifying the identical product under T.I. 26AA(1)(a) in respect of M/s. Guest Keen Williams Ltd. He also referred to the classification list filed by a unit in the Delhi Collectorate classifying rail clips (without hole) under T.I. 25(11). The following case laws were cited in support of his defences.