PVC coated steel wires were treated as steel wires, not a new excisable product, defeating the duty demand.

PVC coating of galvanised steel wires was held not to create a new marketable commodity distinct from steel wires, so the process did not justify treating the goods as a separate excisable product under the residuary entry. The tariff structure and the nature of the process supported classification with steel wires rather than as goods not elsewhere specified, and the duty demand could not stand. A dissenting view considered the coated wires to be a distinct product, but the issue was ultimately decided in favour of the assessee and the impugned order was set aside.

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Issues: Whether PVC coated galvanised steel wires amounted to manufacture so as to attract excise duty and whether the goods were classifiable as a distinct excisable product or continued to be steel wires.

Analysis: The majority held that the process of coating bare steel wires with PVC compound resulted in no new marketable commodity distinct from steel wires in substance. The product remained steel wire, though coated, and the Revenue had not established that it should be treated as a different excisable commodity under the residuary entry. The tariff structure and the nature of the process supported classification with steel wires rather than as goods not elsewhere specified. On that view, the impugned demand could not stand. The dissenting opinion took the contrary view that the process brought about a distinct product and that manufacture had occurred.

Conclusion: The issue was decided in favour of the assessee, and the impugned order was set aside.

Concurring Opinion: Harish Chandra, Member (J), agreed with the dissenting view of G. Sankaran, Sr. Vice-President, that PVC coated galvanised steel wires should be classified as steel wires and that the appeal deserved to be allowed.

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