Excise duty on insulated wires cannot be levied twice where covering is only incidental to completion of the product.

Covering bare copper or aluminium wires with cotton, paper or glass fibre was not treated as manufacture creating a new excisable commodity for a second levy under Item 33-B of the Central Excise Tariff. The coated wires remained within the same tariff scheme, and the insulation or covering was regarded as incidental or ancillary to completion of the product. Because the wires had already suffered duty as bare wires, they could not be charged again merely due to further processing. They also did not fall within Item 33-B(i) due to their cross-sectional area, and could not be taxed again under the residual Item 33-B(ii).

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Issues: Whether covering bare copper or aluminium wires with cotton, paper or glass fibre amounts to manufacture so as to attract excise duty again under Item 33-B of the Central Excise Tariff, particularly when the wires do not satisfy the dimensional limits of sub-item (i).

Analysis: The covered wires remained within the same tariff scheme and had already borne duty as bare wires. The process of coating or insulating was treated as a process incidental or ancillary to completion of the product, but such a process did not create a new excisable commodity for a second levy merely because the product was further processed. The covered wires could not be brought under Item 33-B(i) because their cross-sectional area exceeded the prescribed limits, and they also could not be subjected to duty again under Item 33-B(ii), which covered the residual category. A product that has already suffered duty cannot be charged again merely because it undergoes further insulation or covering within the same tariff entry.

Conclusion: The demand for re-assessment and fresh levy was not sustainable and was rejected against the Revenue.

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