JINDAL STRIPS LIMITED Vs. COMMISSIONER OF C. EX.

JUDGEMENT

(1.) THIS appeal of M/s. Jindal Strips Limited is directed against duty demand of about Rs. 3.5 lakhs and imposition of penalty of Rs. 5,000/ - on them.

(2.) THE facts leading to the passing of the impugned order are that upon scrutiny of the sale records maintained by the appellant, the Central Excise Officers noticed that they had disposed of "different items of parts and machinery and other fabricated items" during the period May, 1991 to March, 1993. The goods disposed of were 'MS Shell, Kiln Shell, Dummy Plate, M.S. Pipe, M.S. Pressure Ring, Column Gantry, Plate for columns, M.S. Tank, G.I. Sheet, Triple Joint, M.S. Angle, M.S.L. Block, Brass Gear, Brass Bush Roll, Gun Metal Bush, Gunmetal Bush Gear, Cast Iron Rod, Brass Bush, Gear Box, Gear coupling, Girth Gear, Discharge hood top bend plate, M.S. Rod, Girth, Gear flange, etc." The appellants explained in reply that the subject goods were not manufactured by them but had arisen from dismantling certain old and used machinery which they had purchased. The appellants also produced challans and other documents relating to the purchase of such old items like kiln. It was the appellant's contention that they had dismantled the old kiln, used part of the items recovered and had disposed of the remaining items after minor operation such as polishing, cleaning, etc. In the adjudication proceedings, the Commissioner accepted the explanation and allowed benefit in respect of certain items which had been co -related as emerging from the dismantling of old kiln, involving duty demand of about Rs. 41,000/ -. The Commissioner did not accept the explanation in respect of the remaining goods and held that duty was rightly payable by the appellants. We read the finding of the Commissioner: -

(3.) IN the present appeal also the contention of the appellant is that they are manufacturers of sponge iron, steel belets and slabs. They do not manufacture the items alleged in the impugned show cause notice. Those items have arisen during the course of dismantling purchased old kilns, etc., and the disposal of such items cannot attract Central Excise duty as that duty is incidental to manufacturing of goods and not resale of purchased goods.