RUBICON STEELS Vs. COMMISSIONER OF C. EX.

JUDGEMENT

(1.) The issue involved in this Appeal, filed by M/s. Rubicon Steels, is whether the activities undertaken by them amounts to manufacture so as to make the products exigible to Excise duty.

(2.) Shri B.L. Narsimhan, learned Advocate, submitted that the Appellants are engaged in the fabrication of certain parts out of the materials received from Railway Coach Factory (RCF); that the activities undertaken by them are basically in the nature of punching and bending; that at the time of supply of fabricated items, they paid excise duty on the process/jobwork charges though the activity undertaken by them did not amount to manufacture; that on account of bona fide belief they did not include the value of the materials supplied by RCF in the assessable value and availed of the benefit of SSI exemption Notification; that the Commissioner, under the impugned Order, has confirmed the demand of duty and imposed equivalent amount of penalty holding that after the process of punching, welding and bending undertaken by the Appellants, goods having a distinct name, character and use emerge which are different from raw materials and thus the activities undertaken by them amount to manufacture and that by including the cost of raw materials in the value of impugned goods, the total clearance value exceeds the eligibility limit of Rs. 3 crores under the SSI Notification.

(3.) Finally, the learned Advocate submitted that substantial demand of duty is hit by time -limit as the show cause notice has been issued on 20 -12 -99 for demanding duty for the period from 1994 -95 to August, 1999; that longer period of limitation is not invocable since the fact that they were not including the material cost was known to the Department through the invoices filed by them which duly made reference to the Purchase Order placed by RCF; that it was open to Revenue to ask for Purchase Orders. Reliance has been placed on the decision in the case of Hindustan Syringes Pvt. Ltd. v. Commissioner of Central Excise, New Delhi, 1998 (29) RLT 323 (CEGAT). He also contended that moreover they were under the bona fide belief that since they were receiving only job charges from RCF, they were liable to pay duty only on job charges; that in any case in the Purchase Order it was clearly indicated that excise duty, if payable, would be extra and the same would be to RCF's account; that thus there cannot be any intention to evade payment of duty; that the intention to evade payment of duty can arise only in a situation where the excise duty liability is to be borne by the manufacturer himself and not by the buyer; that this legal position is supported by the decision in the case of Rajasthan Cylinders and Containers v. Commissioner of Central Excise Jaipur, 1998 (29) RLT 423 (CEGAT).