Drawing wire is not manufacture, and stock shortages based only on eye estimate cannot sustain a duty demand.

Drawing wire from wire rods does not amount to manufacture where the governing precedent and departmental circular recognise the process as non-manufacturing, so no duty liability arises on that activity. A demand based on stock shortage worked out only by eye estimate, without actual physical weighment or reliable verification, is unsustainable. On both grounds, the demand failed and the impugned order was set aside in full.

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Issues: (i) Whether drawing wire from wire rods amounts to manufacture for the purpose of levy of duty. (ii) Whether a demand can be sustained on the basis of stock shortage assessed only by eye estimate and without physical weighment.

Issue (i): Whether drawing wire from wire rods amounts to manufacture for the purpose of levy of duty.

Analysis: The activity carried on was drawing wire from wire rods. The governing precedent and the departmental circular placed on record recognised that drawing wire of lesser gauge from wire rods does not amount to manufacture. Once the process does not amount to manufacture, no duty liability can arise on that count.

Conclusion: The issue is decided in favour of the assessee.

Issue (ii): Whether a demand can be sustained on the basis of stock shortage assessed only by eye estimate and without physical weighment.

Analysis: The shortage was worked out on an eye estimate basis and not by actual physical weighment of stock. In the absence of reliable physical verification, such a method was held insufficient to support the demand. The Tribunal's view on this issue was applied to reject the demand founded on estimated shortages.

Conclusion: The issue is decided in favour of the assessee.

Final Conclusion: The demand was unsustainable on both grounds, and the impugned order was set aside in its entirety.

Ratio Decidendi: Drawing wire from wire rods, by itself, is not manufacture, and a duty demand based on stock shortages assessed merely by eye estimate without physical weighment cannot be sustained.

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