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PETITIONER: M/S. EASTERN DIECASTING INDUSTRY PVT. LTD.

       Vs.

RESPONDENT: THE COLLECTOR OF CENTRAL EXCISE, CALCUTTA

DATE OF JUDGMENT:       27/08/1997

BENCH: SUHAS C. SEN, K. T. THOMAS

ACT:

HEADNOTE:

JUDGMENT:                      J U D G E M E N T SEN, J.      The facts of this case have been summarised by Customs, Excise &  Gold (Control)  Appellate  Tribunal  (CEGAT).  The appellant-company manufactures  railway  overhead  equipment and fitting  for electric  traction falling under Item 68 of the Central  Excise Tariff. According to the Department, the Central Excise Officers visited their factory on 1.8.1983 on the basis  of intelligence  report that  the appellants  are manufacturing railway  overhead equipment  and fittings  and were removing  the same without payment of duty and demanded the records and documents relating to the manufacture, terms and conditions  of supplying  the material  to the railways. Shri Milan Pakhira, Director of the Company gave a statement on that  day saying  inter alia  that  they  were  supplying overhead equipment and fittings for electric traction out of raw material  purchased from  outside  and  the  goods  were directly supplied  to the  railways. The  Company under took fabrication of  such fittings  for  railway  electrification contractors on  charging them  fabrication charges where the contractors themselves supply the raw material. He also said the process  under taken  by  them  was  melting  of  copper aluminium and tin and the molten metal was cast in to moulds as per  railway specification  and that  the material  after casting  was   further  subjected   to  operations  such  as fettling, grinding, dressing, machining, assembling wherever necessary  with   fasteners.  The   Department,  thereafter, ascertained the  value of  clearances of these goods for the past period  1979-80 to 1982-83 in the light of Notification No. 89/79  dated 1.3.1979  and Notification no. 105/80 dated 19.6.1980 which  granted exemption to such articles upto Rs. 30 lakhs  in the  current financial  year if  the  value  of clearances during  the  preceding  financial  year  did  not exceed Rs.  30 lakhs. it was found that on this basis, there had been  less than  Rs. 30  lakhs clearances in 1980-81 and that the  clearance  during  1981-82  was  Rs.41,64,574.43p. making for  liability to pay duty on the amount in excess of Rs. 30  lakhs and also that their clearances of value of Rs. 42,06,178/- during  1982-83 had  to  pay  duty  without  any exemption as  the clearances during preceding financial year

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1981-82 had  exceeded Rs.  30 lakhs. A show cause notice was accordingly issued  on 2.12.1986 and after considering their reply thereto  and hearing them in the matter, the collector of Central Excise, Calcutta upheld the demand of duty in the sum of Rs. 4,29,660.2.p. and also imposed penalty in the sum of Rupees  one Lakh Under rule 1730 of Central Excise Rules, 1944.      The  appellant-company   went  up   in  appeal  to  the Tribunal. The Tribunal upheld the order of the Collector but insofar  as  the  quantum  of  demand  was  concerned  while agreeing  with   the  contention  of  the  appellant-Company regarding double  computation of  value  of  raw  materials, asked the  Collector to  verify this  factual aspect  on the basis of  evidence to  be produced  by  the  appellant  and, thereafter, decide  whether the  duty  demanded  would  need modification.  The   Appellate  Tribunal  also  reduced  the quantum of penalty to Rs.25,000/-.      At the  material time,  Tariff Items  26A (1a),  27 (a) (ii) and 68 stood as under:      "26A.  COPPER   AND  COPPER  ALLOYS      CONTAINING NOT LESS THAN FIFTY CENT      BY WEIGHT OF WEIGHT OF COPPER.      (1)     x      x       x       x      (1a)  Wire   bars,  wire  rods  and      castings, not otherwise specified.      27. ALUMINIUM -      (a)(i)   x     x      x      x      (ii)  wire   bars,  wire  rods  and      castings, not Otherwise specified.      68. ALL  OTHER GOODS, NOT ELSEWHERE      SPECIFIED, BUT EXCLUDING -      ...................................      ......................."      On behalf  of the  appellant -  Company,  it  has  been argued that castings made out of aluminium and copper argued that castings  made  out  of  aluminium  and  copper  remain castings even after they received the same from the railways and returned it to them. What was received from the railways was casting  in from.  What is returned is casting converted into an  identifiable  shape.  It  was  contended  that  the process undertaken  by the  appellant was  to  melt  copper, aluminium and  tin according  to melt  copper, aluminium and tin according  to the  specification of  the railway. Melted metal was  cast into  moulds and  the material after casting was sold  to the  railway. Reliance  was placed on behalf of the appellant  on a  decision of  this  Court  in  Vasantham Foundry v.  Union of India and Other, (1995) 5 SCC 289 where it was  held that  iron castings  in its  solid form must be treated as "cast iron" for the purpose of Section 14 (iv) of the Central  Sales Tax  Act. It  was further held that "cast iron casting"  in its basic or rough form must be held to be "cast iron". But if thereafter any machining or polishing or any other process was done to the rough cast iron casting to produce something  else, these  could not be treated as cast iron castings in its primary or rough form.      In the  instant case,  the finding  of fact is that the appellant after  casting was done, carried out various post- casting operations  such as  fettling,  grinding,  dressing, machining and  assembling with  fasteners. This  finding  is corroborated  by  the  statement  of  the  Director  of  the Company, On  these facts,  the CEGAT dismissed the appeal of the appellant  could not  be classified  as "castings"  and, therefore, had to be taxed under Tariff Item 68.      The findings  made  by  the  Tribunal  are  essentially findings of  fact. of  fact. They  are based on evidence and

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cannot be  regarded as perverse. In that view of the matter, the appeal is dismissed. There will be no order as to costs.