CHINTTPURNI ENGINEERING WORKS Vs. COMMR. OF C. EX.

JUDGEMENT

(1.) In this Appeal filed by M/s. Chinttpurni Engineering Works, the issues involved are whether the processes undertaken by them amount to manufacture and whether the cost of inputs supplied free of cost by the Railways is to be included in the assessable value of the goods.

(2.) Shri C. Harishankar, learned Advocate, submitted that the Appellants fabricate Fan shaped switches, tongue rails and stock rails (out of which Switch Expansion Joints are fabricated at site) and Check Rails out of rails supplied free of cost by the Railways; that SEJs do not come into being at the factory of the Appellants at all since they are capable of coming into existence as SEJs only at the site, when they are welded to the ground; that they clear only tongue and stock rails from their factory; that the production of tongue rails and stock rails merely involved bending of rail lengths at both ends; that such tongue rails and stock rails, when fastened to the ground at the rail site with the requisite accessories, constitute a SEJ; that it has been held by the Tribunal in J. Sons Corporation Ltd. v. Commissioner of Central Excise, Meerut -2000 (125) E.L.T. 1068 (T) that cutting of rough rails of Long lengths and bending and sharpening them at the ends as per customer's specifications resulting into stock rails and tongue rails do not amount to manufacture as no new product comes into existence. He also relied upon the decision in the case of Cemcon Tracks Industries v. Commissioner of Central Excise, New Delhi - 2001 (127) E.L.T. 56 (T) wherein it has been held that conversion of rails into SEJ does not amount to manufacture; that Civil Appeal filed by the Commissioner of Central Excise has been dismissed by the Supreme Court as reported in 2001 (133) E.L.T. A159.

(3.) He, further, submitted that Check Rails are used at railroad intersections; that in Order to provide a gap for the run of the coach wheel to move on, a short length of rail is placed, parallel to the running rail, on the road, so that, in the gap between the two, the wheel can move; that in Check Rails, the only processes which are adopted are simply drilling and machining and after that grinding is done on the machining portion; that they never add any part or fitting in it; that these processes do not change the character of rail; that they are still recognized as rails and their utility is also always as rails; that the Assistant Commissioner Division VI, Hyderabad, under Adjudication Order No. 41/96 dated 18 -6 -1996, has held that processes undertaken by M/s. J.S. Industries (P) Ltd. to make check Rails, do not amount to manufacture as rails remain rails and no distinct product emerges.