Tribunal excludes cross arms from SSI exemption, remands for recomputation

The tribunal held that cross arms were non-excisable goods based on established case law and directed the exclusion of their value from total clearances for Small Scale Industries (SSI) exemption. The tribunal set aside the previous orders, remanded the matter for recomputation, and instructed the Commissioner to issue a speaking order after hearing the appellants. The appeals succeeded on remand with specific directions for reevaluation of clearances.

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Issues: Classification of cross arms and dutiability

Classification of Cross Arms:
The appeal involved two cases disputing the classification of cross arms. The advocate for the appellants argued that a previous tribunal decision had held cross arms as non-dutiable due to the lack of a manufacturing process under the Central Excise Act. The advocate contended that if cross arms were non-excisable goods, their value should be excluded from total clearances for SSI exemption. The JDR for the Revenue reiterated the Revenue's position.

The tribunal reviewed previous judgments, including Tata Engineering and Locomotive Co. Ltd., Tansi Engineering Works, Vindhya Paper Mills, and others, which established that certain activities like cutting, drilling, and welding did not amount to manufacturing. The tribunal found that the issue had been settled by these judgments and held that the Commissioner was unjustified in not following their ratio. The tribunal set aside the impugned orders and allowed the appeals, emphasizing that the manufacture of cross arms did not lead to excisability based on the previous orders.

Dutiability Issue:
The tribunal concluded that since the excisability and dutiability of cross arms had been previously decided, the same rationale should apply to the current appeals. The tribunal directed the original authority to recompute the value of clearances under the SSI Exemption Notification by excluding the value of cross arms, which were deemed non-excisable. The tribunal set aside the Orders-in-Original and remanded the matter to the Commissioner for recomputation and a speaking order after hearing the appellants. The appeals succeeded by way of remand with specific directions for the reevaluation of clearances.

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