TaxTMI 
TaxTMI 
2002 (5) TMI 50
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....t and cleared the sets without payment of duty, without intimation and without observing the Central Excise formalities. 2. The Superintendent of Central Excise, Range-II, Palghat, while perusing advice notes of the factory observed that certain VTRs and colour monitors were manufactured and cleared by the appellant during the period June, 1982 to August, 1982 and issued letter dated 12-8-1982 asking the appellant to furnish details of the sets cleared and to explain why duty should not be demanded on such sets and why action should not be taken for contravention of Central Excise rules. However, the appellant did not furnish the required information. Thereafter, the Superintendent issued a show cause notice dated 6.12.1982 asking the appellant why a duty of Rs. 5,58,000/- due on 56 sets of VTRs and colour monitors should not be demanded under Section 11A of the Act and another show cause notice dated 2-4-1983 was issued for Rs. 1,78,500/- due on 17 sets of VTRs and colour monitors. The appellant in response gave replies by letters dated 31-1-1983 and 11-2-1984 respectively. 3. On 9-6-1983, the Central Excise Officers searched the factory of the appellant and on 14-6-1983 the....
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....g all aspects, by his detailed order dated 24-7-1987 rejected all the contentions raised by the appellant and confirmed the demand. The appeal filed by the appellant before the Tribunal (CEGAT) challenging the said order of the Collector dated 24-7-1987 was dismissed on 6-3-1997. The application filed by the appellant under Section 35-F of the Act for reference was also rejected on 1-9-1998. Hence, this appeal. 6. Before us, Mr. Raju Ramachandran, learned Senior Counsel urged that (1) fastening imported disassembled VTRs with colour monitors did not amount to manufacture within the meaning of Section 2(f) of Central Excise & Salt Act, 1944; the fasteners had also been imported along with disassembled VTRs and colour monitors; VTRs with colour monitors were not liable for payment of excise duty as the countervailing duty applicable to the same at the time of import under tariff item had been paid; (2) the demand of duty was grossly barred by limitation; the Commissioner and Assistant Commissioner could not issue separate show cause notices; the very fact of Assistant Collector issuing notices earlier clearly shows that the Department was fully aware of the import of the disassemb....
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....e must be transformation, a new and different article must emerge having a distinctive name, character or use." 10. It is well settled that a question as to when a manufacture of product takes place within the meaning of Section 2(f) of the Act is a mixed question of law and fact. The nature and the extent of processes may vary from case to case. When a change takes place and a new and distinct article comes into existence known to the consumers and the commercial community as a commercial product, which can be no longer regarded as the original commodity, such a change constitutes a process of manufacture. 11. It is not disputed that the imported kits of components of VTRs and colour monitors in SKD condition were items falling under Item 68 for levy of countervailing duty. It is clear from the material placed on record that by the process undertaken by the appellant a change is brought about facilitating the utility of the product for which they were meant. In other words, pursuant to the process, a transformation has taken place at the hands of the technical experts or skilled persons and not by laymen, which made the product to have a distinct character and use. Such prod....
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....comes into being. The appellant will become a manufacturer of that product and as such liable to duty. That is precisely what the Tribunal found on the facts of the case. The appellant seems to have been obsessed by the idea that as a part of machine is liable to duty then the whole end product should not be dutiable as separate excise goods. That is mistake, a part may be goods as known in the excise laws and may be dutiable. The appellant in this case claims to have manufactured only the indicator system. If the indicator system is a separate part and a duty had been paid on it and if the rules so provide then the appellant may be entitled to abatement under the rules. But if the end product is a separate product which comes into being as a result of the endeavour and activity of the appellant then the appellant must be held to have manufactured the said item. When parts and the end product are separately dutiable - both are taxable." 14. This being the position, in our view, the Tribunal was right in its conclusion that the appellant was liable to pay duty on the end product. The decisions cited before us by the learned Counsel for the appellant in support of his stand were c....