COLLECTOR OF CENTRAL EXCISE Vs. TIKITAR INDUSTRIES

JUDGEMENT

(1.) THE Common issue involved in these nine appeals is whether the process of conversion of straight grade bitumen into air blown grade bitumen amounts to manufacture.

(2.) THE facts in brief in appeal No. E/4498/93 -C are that M/s. Tiki Felt Industries, appellants (TFI), manufactured Bitumen Coated felt. They purchased duty paid hessain cloth, straight grade bitumen, fillers and mica as raw materials. The straight grade bitumen was converted into blown grade bitumen through oxidation, known as blowing process. Such blown grade bitumen was applied on both sides of the hessian cloth. A show cause notice dated 24 -1 -1992 was issued to them for demanding duty in respect of Blown Grade Bitumen (BG Bitumen) falling under sub -heading 2713.20 of the Schedule to the Central Excise Tariff Act for the period from February, 1987 to September, 1991. The Collector, Central Excise, in impugned Order dated 10 -3 -1993, confirmed the demand of Central Excise duty amounting to Rs. 2,84,981.23, imposed a penalty of Rs. 1,00,000/ - and confiscated plant and machinery with an option to redeem the same on payment of fine of Rs. 25,000/ - holding that the process of conversion of straight grade bitumen into blown grade bitumen amounts to manufacture, relying upon the decision of the Appellate Tribunal in the case of Bitumen Products (India) Ltd. v. CCE, 1989 (44) E.L.T. 504 (T). The Collector also held that longer period was invokable for demanding the duty as they had only declared their final product i.e. felt, and they did not at all declare blown grade bitumen produced by them.

(3.) SHRI M. Shroff, learned Advocate, submitted that the straight grade bitumen was subjected to heating/blowing process so as to improve the quality/utility of the bitumen by virtue of raising the softening point and peneteration; that the process of air blowing did not amount to manufacture and the blown grade bitumen could not be said to be a new commercial commodity having new name, character and use because :