Captive consumption of intermediate wire was not separately dutiable, and extended limitation failed without proved suppression.

Intermediate wire emerging during successive drawing and captively used in manufacturing electrical wires and cables is not separately dutiable where it retains the same essential character and does not become a distinct excisable commodity with a new name, character and use. Captive consumption alone does not create a fresh levy on an intermediate stage in continuous manufacture. The note also states that the extended limitation period cannot be invoked without proved suppression of facts or wilful intent to evade duty; on the facts discussed, the demand beyond the normal period was not maintainable. The stated result is that the duty demand failed on merits and limitation.

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Issues: (i) Whether intermediate wire emerging at each stage of drawing, and captively consumed in the manufacture of electrical wires and cables, was independently dutiable; (ii) Whether the demand for duty was barred by limitation and the extended period could be invoked.

Issue (i): Whether intermediate wire emerging at each stage of drawing, and captively consumed in the manufacture of electrical wires and cables, was independently dutiable.

Analysis: The process involved successive drawing through dies, but the material remained wire throughout and did not acquire a new identity at each stage. Duty is attracted only when manufacture results in a new commodity with a distinct name, character and use. Captive consumption does not by itself create a fresh levy where the intermediate product is only a stage in the continuous manufacture of the same final product. Since the finished product was electrical wire and cables, the intermediate stages did not give rise to separate excisable commodities.

Conclusion: No independent duty was leviable on the intermediate stages, and the assessee's stand succeeded on this issue.

Issue (ii): Whether the demand for duty was barred by limitation and the extended period could be invoked.

Analysis: The show cause notice alleged wilful contravention and intention to evade duty, but the record did not establish suppression of facts or any material rebutting the assessee's explanation. In the absence of proved suppression, the extended limitation period could not be sustained.

Conclusion: The demand beyond the normal limitation period was not maintainable, and this issue also stood in favour of the assessee.

Final Conclusion: The demand of duty was unsustainable both on merits and on limitation, and the appeal failed.

Ratio Decidendi: Excise duty is attracted only when manufacture results in a new commodity with a distinct name, character and use, and the extended limitation period cannot be invoked without proved suppression or wilful evasion.

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