Manufacture and marketability of processed M.S. goods upheld, with classification, limitation and penalty also sustained.

Processing plain M.S. plates into profiles, rings, circles, angles and channels was treated as manufacture because the resulting products were commercially distinct articles with a different shape, identity and use. The goods were also found marketable, as sale to customers against orders and payment was sufficient even without sale in the open market, making them dutiable. On classification, the processed goods were held to fall under sub-heading 7326.90 rather than 7208.11/7208.99. Concealment of the manufacturing activity and non-disclosure of material facts justified invocation of the extended limitation period, and the penalty was sustained.

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Issues: (i) Whether conversion of plain M.S. plates into M.S. profiles, rings, circles, angles and channels amounted to manufacture; (ii) whether the goods were marketable and therefore dutiable; (iii) whether the goods were classifiable under sub-heading 7326.90 or under sub-heading 7208.11/7208.99; (iv) whether the demand was barred by limitation and the extended period was unavailable; and (v) whether penalty was sustainable.

Issue (i): Whether conversion of plain M.S. plates into M.S. profiles, rings, circles, angles and channels amounted to manufacture.

Analysis: The process changed the original plates into commercially distinct articles with different shape, use and identity. The resultant products were not the same commodity in another form, but new and distinct goods emerging from processing through profile-cutting machines.

Conclusion: The activity amounted to manufacture, against the assessee.

Issue (ii): Whether the goods were marketable and therefore dutiable.

Analysis: The finished goods were being sold to customers against orders and payment. Actual sale in the general market was not necessary, and marketability depended on whether the goods were capable of being bought and sold in the facts of the case.

Conclusion: The goods were marketable and dutiable, against the assessee.

Issue (iii): Whether the goods were classifiable under sub-heading 7326.90 or under sub-heading 7208.11/7208.99.

Analysis: Since the processed goods were distinct articles of iron and steel and not plain M.S. plates, the classification suggested by the assessee was not applicable. The adjudicating authority's treatment of the goods as other articles of iron and steel was upheld.

Conclusion: Classification under sub-heading 7326.90 was correct, against the assessee.

Issue (iv): Whether the demand was barred by limitation and the extended period was unavailable.

Analysis: The record showed non-disclosure of the true nature of the manufacturing activity and concealment of material facts from the department. In those circumstances, the extended period of limitation was validly invoked and the demand was not time-barred.

Conclusion: The demand was within limitation, against the assessee.

Issue (v): Whether penalty was sustainable.

Analysis: As duty liability and suppression were upheld, no ground existed to interfere with the penalty imposed.

Conclusion: The penalty was sustained, against the assessee.

Final Conclusion: The impugned order was affirmed in full and the appeals failed on all substantive grounds.

Ratio Decidendi: Where processing transforms plain metal plates into commercially distinct finished articles with different identity and use, the activity amounts to manufacture, and concealed clearances justify invocation of the extended period of limitation.

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