Cold drawing of electrical resistance wire is not manufacture; extended limitation also fails absent suppression of facts.

Mere cold drawing of imported ferrous base electrical resistance wire into a thinner gauge does not amount to manufacture where no new excisable commodity emerges; the drawn wire remains electrical resistance wire and cannot be shifted to a different tariff item on that basis. The document also notes that limitation cannot be extended where the Department already had correspondence, Bills of Entry, and prior notice showing knowledge of the material facts, so suppression is not established. On that reasoning, the demand fails both on manufacture and on limitation, and the assessee succeeds.

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Issues: (i) Whether cold drawing of imported ferrous base electrical resistance wires into thinner gauge amounted to manufacture giving rise to a new excisable commodity and whether the resultant goods were classifiable under Tariff Item 33B(ii) or Tariff Item 26AA of the erstwhile Central Excise Tariff; (ii) Whether the differential duty demand was barred by limitation.

Issue (i): Whether cold drawing of imported ferrous base electrical resistance wires into thinner gauge amounted to manufacture giving rise to a new excisable commodity and whether the resultant goods were classifiable under Tariff Item 33B(ii) or Tariff Item 26AA of the erstwhile Central Excise Tariff.

Analysis: The imported material was already electrical resistance wire, and the process undertaken was only redrawing by cold drawing into a lesser dimension. The earlier Tribunal ruling on resistance wire held that such drawing does not bring into existence a new commodity and the wire remains electrical resistance wire despite reduction in gauge. That reasoning was applied here. Since no new excisable commodity emerged, the process could not be treated as manufacture.

Conclusion: The issue was decided in favour of the assessee. The process was not manufacture and no duty was leviable on that basis.

Issue (ii): Whether the differential duty demand was barred by limitation.

Analysis: The record showed repeated correspondence between the Department and the assessee regarding the nature of the imported raw material, the finished product and the process of manufacture, along with supply of Bills of Entry describing the goods as electrical resistance wire. The Department had also earlier issued a show cause notice on the same material. In these circumstances, suppression of facts could not be alleged so as to justify the extended period.

Conclusion: The issue was decided in favour of the assessee. The demand was barred by limitation.

Final Conclusion: The demand failed both on the question of manufacture and on limitation, and the assessee succeeded on the appeal.

Ratio Decidendi: Mere cold drawing of electrical resistance wire into a thinner gauge, without emergence of a new commodity, does not amount to manufacture; where the department has knowledge of the material facts, the extended period cannot be invoked in the absence of suppression.

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