TaxTMI 
TaxTMI 
1991 (1) TMI 263
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....on in all the above-captioned three appeals, and the same to be disposed of by this common order. Accordingly, we proceed to decide the same. 2. Shri A. Vijay Raghvan, learned Consultant, stated that the goods in dispute are steel forgings (drop forgings) for automobile industries as per the drawings supplied by the automobile manufacturers). Shri Raghvan pleaded that earlier the roughly shaped forgings were falling under Tariff Item 25(8) of the Central Excise Tariff prior to 1-3-1986, and with effect from 1-3-1986 the same fall under heading 72.08. He pleaded that description under the old as well as new Tariff is the same, viz., "Pieces roughly shaped by rolling or forging of iron and steel, not elsewhere specified". Shri Vijay Raghvan, learned Consultant, pleaded that earlier the assessee was availing the benefit of Exemption Notification No. 208/83-C.E., dated 1st August, 1983 and also Notification No. 31/76-C.E., dated 28th February, 1976. He pleaded that the assessee was availing the benefits of these Notifications. Suddenly, the Board issued a clarification dated 4-6-1987 which appears on page 16, filed by him, which reads as under : Iron & Steel Forging - It is observed....
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....KRISHNAN) COLLECTOR (CENTRAL EXCISE) COCHIN. Shri Ramchandani, learned SDR, stated that in view of the Circular issued by the Board as well as judgment of the Supreme Court in the case of TISCO v. Union of India, reported in 1988 (35) E.L.T. 605, he does not press appeal No. E/3783/88 filed by the Revenue and concedes in respect of appeal No. E/1259/88-B1. For appeal No. E/1348/88-B1, he fairly stated that the facts are similar and, as such, he leaves it to the discretion of the Bench. 4. We have heard both the sides and have gone through the facts and circumstances of the case. We have perused the Government of India, Ministry's Circular F. No. 139/79/87-CX. 4, dated 18th September, 1989 as reported in 1990 (47) E.L.T. T-14 is reproduced below: "FORGINGS AND FORGED PRODUCTS (CHAPTERS 72 & 73) I am directed to say that doubts were arisen on the classification of forgings and forged products during the periods 1-8-1983 to 27-2-1986, 28-2-1986 to 29-2-1988 and 1-3-1988 onwards and in particular the scope of the expression 'Pieces roughly shaped' and the application of the concept of blanks and other semi-finished articles having essential character of the finished a....
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....of machinery parts etc. However, for the period 1-3-88 to 22-6-88 i.e. till the issue of Notification No. 223/88-C.E., dated 23-6-1988 the implications of HSN Explanatory Notes were not fully understood and their strict application may cause undue hardship to the trade. The Board is contemplating ascertainment of general practice of assessment for considering waiver of duty under Section 11-C. But after 23-6-1988, the classification in the light of HSN Explanatory Notes will be strictly applied. The classification issue may be finalised accordingly - But it may be noted that refund of duty paid is not contemplated since duty paid under Heading 7308 was eligible for MODVAT credit as has been clarified in Board's Telex dated 4-6-1987. Para Nos. 4, 5 & 6 from the judgment of the Supreme Court in the case of TISCO v. Union of India, reported in 1985 (35) E.L.T. 605 are reproduced below: "4. A perusal of these items makes it clear that forged steel products are liable to duty in terms of Tariff Item No. 26AA. It is also beyond dispute that forged steel goods with which we are concerned would be covered by Tariff Item No. 26AA(ia) which included forged or extruded shapes and sec....
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....ere the quantity small and drop/close die forging and/or upset forging process under which the product is made with the help of dies. Thereafter, the extra/unwanted material is removed by either trimming or by gas cutting or by skin cutting to achieve the shape and section nearest to the forged steel product required and also the forging clearances specified in the standards by ISI/or International. It is conceded by the Government that forging would not cease to be forging by processes like removal of superfluous extra skin or cast iron." The learned Judge had further pointed out in the next paragraph of the said judgment that the removal of extra/unwanted surface steel by either trimming or by gas cutting or by skin cutting of the forged products must be regarded as incidental or ancillary to the process of manufacture. This view is also consistent with the definition given to the term "manufacture" contained in sub-section (f) of Section 2 of the Central Excises & Salt Act, 1944. This definition shows that the manufacture includes any process incidental or ancillary to the completion of a manufactured product. We are, therefore, of the view that in respect of the said goods t....