TaxTMI 
TaxTMI 
1990 (10) TMI 78
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....rocess, aluminium nickel powder comes into existence and the powder is used in various pharmaceutical, chemical and petroleum products. 2. Section 3 of the Central Excises and Salt Act, 1944 (hereinafter referred to as the 'Act') provides that there shall be levied and collected duties of excise on all excisable goods which are produced or manufactured in India at the rates set forth in the First Schedule to the Act. Tariff No. 27(a)(i) of the First Schedule reads as under : I Item No. Tariff Description Rate of duty 27 Aluminum - (a) (i) In any crude form (including ingots, bars, blocks, slabs, billets, shots, and pellets). Fifty per cent ad valorem plus Rs. 2000/- per metric tonne Explanation II to Tariff Item No. 27 provides that expression "aluminum' shall include any alloy in which aluminium predominates by weight over each of the other metals. The Government of India, in exercise of powers conferred by sub-rule (1) of Rule 8 of the Central Excise Rules, 1944, published exemption notification in respect of certain specified types of aluminium products. The notification exempts aluminium in any crude form (including ingots, bars, blocks, ....
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....minium as contemplated under Tariff Item No. 27(a)(i) and the authorities below overlooked that merely because crushing of ingots into powder, the powder cannot be said to be not in crude form. The learned counsel also submitted that the process of crushing ingots into powder does not amount to manufacture and consequently, the authorities below were in error in holding that the Company is liable to pay duty under Tariff Item No. 68. Shri Desai, learned counsel appearing on behalf of the revenue, on the other hand, submitted that the view taken by the three authorities below does not suffer from any infirmity and is not required to be disturbed in exercise of writ jurisdiction. It was contended by Shri Desai that even if two views are possible it is not permissible to disturb the conclusion of the authorities as regards whether aluminium nickel powder is liable to duty under Tariff Item No. 68. In view of the rival submission, two questions which squarely fall for consideration are (a) whether aluminium nickel powder can be described as aluminium in any crude form, and (b) whether the process of converting ingots into powder can be considered as a manufacturing process liable to pa....
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.... scrap of material. This process of manufacture is liable to payment of duty under Tariff Item No. 27. 6. Shri Talyarkhan submits that the ingots are converted into powder and by this process, the contents of aluminium are not altered nor a different article comes into existence. It was urged that powder is also a form of aluminium and, therefore, should be equated with the expression 'in crude form'. It is not possible to accept the submission. The ingots were treated as aluminium in crude form by artificial definition under Tariff Item No. 27 and it is not permissible to stretch this artificial definition even when ingots are converted into powder by further process. The Legislature contemplated that ingots which come into existence by combination of two metals should be treated as aluminium in crude form for the purpose of Tariff Item No. 27. It is not permissible to stretch the entry by holding that even when the ingots undergo further process and are converted into powder form, still the powder form should be treated as aluminium crude form. The acceptance of submission of Shri Talyarkhan would lead to very unusual results. The mere fact that the contents of powder and the ....
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....into existence at the second stage by further manufacturing process on the ingots and the article which comes into existence at the second stage cannot be treated as aluminium in any crude form. In our judgment, the authorities below were right in concluding that the manufacture of aluminium nickel powder attracts duty under Tariff Item No. 68 which is a residuary item and not under Tariff Item No. 27(a)(i) of the First Schedule. Once it is held that Tariff Item No. 27(a)(i) is not attracted, then the exemption notification is of no assistance to the Company. 8. Shri Talyarkhan then submitted that the conversion of ingots into powder does not amount to a process of manufacture inviting duty under the provisions of the Act. The learned counsel urged that by merely pulverising the ingots after breaking them into lumps, results into manufacture of aluminium nickel powder and this process should not be treated as one of manufacture demanding payment of excise duty. The learned counsel made reference to the decision in the case of Minerals & Metals Trading Corporation of India Ltd. v. Union of India & Others reported in AIR 1972 Supreme Court 2551 and the decision in the case of Sand....