GILLOORAM GAURISHANKER Vs. COMMISSIONER OF C. EX., JAMSHEDPUR

JUDGEMENT

(1.) THE total amount of duty confirmed in all the stay petitions is to the tune of Rs. 9,24,818.54 and penalty of Rs. 9.25 lac. The said duty has been confirmed by the Commissioner for the period 1990 to Feb. 1994. The appellants were engaged in the manufacture of aluminium wires out of the aluminium ingots received by them under DEEC scheme. Aluminium wire which is the final product is exempt from duty under the provisions of Not. No. 180/88 -CE dated 13 -5 -1988. The present duty has been confirmed against the applicants on the wire rods which the Department alleges that aluminium wire rod made out of aluminium ingots has further been used in the manufacture of aluminum wire. Appellants contention duly represented by Shri B.N. Chattapadhaya, learned Consultant is that these aluminium wire rods are not marketable inasmuch as the length of the wire rods which emerge in their unit in a continuous process is to the tune of 15 to 25. In support of the above submission, they have produced certificates from M/s. BALCO and NALCO which are to the effect that it is not commercially possible to draw wire out of the aluminium wire rods of shorter length. Shri Chattapadhaya submits that the appellants have taken a definite stand that the wire rods are not marketable. Revenue is not giving even a single example for marketability of the product in question. Relying on the Supreme Court decision Shri Chattapadhaya submits that the marketability is the basic criteria for levy of duty on any product irrespective of the fact that the same has been mentioned specifically in the tariff. It was the duty of the Revenue to produce any evidence to show that the goods manufactured by the appellants and captively consumed by them in the manufacture of aluminium wires are marketable. He also argues that show -cause notices being barred by limitation. All the three show -cause notices adjudicated by the Commissioner have been issued beyond the normal period of limitation of six months. In this connection, he draws our attention to a letter dated 28 -10 -1989 (Page 184 of the paper book) written to the Asstt. Collector of C. Ex., Dhanbad intimating to the effect that aluminium ingots imported under duty free licences will be brought to their factory and will be converted into aluminium wire rods in case of imported aluminium ingots and these will be further used in the manufacture of AAC/ACSR conductors. He also submits that the appellants had been clearing their final product without making any debit entry in Modvat accounts. From this, the Revenue should have presumed that wires in question are being manufactured out of non -duty paid ingots. As such he submits that demand in question is barred by limitation.

(2.) AS regards the financial position, Shri Chattapadhaya draws our attention to the latest balance sheet in the year ending as on 31 -3 -1999, the profit made by the applicants before taxation is to the tune of Rs. 4,04,790.71 and earlier to that there were losses.

(3.) COUNTERING the arguments, Shri J.M. Kennedy, learned JDR for the Revenue submits that the two issues raised by the appellants are in favour of the Revenue. He submits that wire rod is a specified item and entered in tariff and merely because the appellants are not marketing the same, it cannot be said that the same is not marketable. Emphasising on the term marketable, he submits that criteria laid down by the Honble Supreme Court in a number of cases is capability of the product to be the marketability and not actual marketing of the goods in question. He submits that the appellants are getting the goods manufactured from their job workers also which establishes that the goods are capable of being bought and sold in the market. As regards the applicants plea on limitation, he submits that no statutory records in respect of the wire rods were maintained by them and no classification lists was filed by the applicants. The bona fide belief adopted by the appellants is not based upon any reasons or evidence on which they have entertained such belief.