CCE Vs. G.M. ENGG. WORKS

JUDGEMENT

(1.) Heard both sides. Revenue filed this appeal against the order -in -appeal passed by the Commissioner (Appeals). In the impugned order, the Commissioner held that the processes undertaken by the appellants on the rough castings is 'fettling and proof machining', therefore, casting remains casting and is not classifiable as motor vehicle parts.

(2.) The contention of the revenue is that parts were originally in the form of "iron castings" and were supplied to the assessee by M/s. Eicher Goodarth Ltd., Alwar for machining and finishing on job work basis. The assessee conducted the process of machining and finishing on these iron castings and returned to the supplier without payment of duty. The character and conducting the process of machining and finishing as the iron casting falling under the erstwhile Tariff Item 68 and as such the process would amount to manufacture. The facts of the case laws cited by the assessee before the Commissioner (Appeals) were different from the instant case and, therefore, could not be applied in this matter, because in the referred case, the assessees were engaged in 'proof machining' of crude castings and the product (castings) retained its original characteristics, not catering to tailor made requirements, even after the process. The crude castings were apparently sent for specific activities like fettling and proof machining, were essential at the primary stage of manufacturing activity of motor vehicle parts. The resultant product after fettling and proof machining was distinct from crude castings and was apparently motor vehicle parts at the primary stage having been fettled and proof machined according to tailor made requirement. The resultant product, thus could not be termed as 'castings' and the processes like fettling and proof machining in the instant case, thus tantamount to manufacture, bringing into existence a distinct product.

(3.) We find that the issue involved in this appeal is settled by the Tribunal in the case of M/s. Shivaji Works Ltd. v/s. C.C.E. reported in : 1994 (69) E.L.T. 674 wherein the Tribunal held that castings remain castings from the stage of their emergence from the castings mould to the stage of being proof machined. The Board accepted the decision of the Larger Bench of the Tribunal and issued a circular dated 1.7.1996 to the effect that castings coming out of castings moulds up to the stage of proof machining and requiring further machining before being used as machine parts would be appropriately classifiable as castings. In the present case, it is not disputed by the revenue that after fettling and proof machining, the castings were returned to the principal manufacturer and the principal manufacturer, further, undertakes the processes such as boring operations, making holes on the body for fitting of hut and bolts, balancing of body, pump fitting in the castings, making groove for the rings, etc. In view of the above decision of the Tribunal and the Board's circular, we find no infirmity in the impugned order. The appeal is rejected.