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Sundaram-clayton Ltd. Vs. Collector of Central Excise - Court Judgment

LegalCrystal Citation
CourtCustoms Excise and Service Tax Appellate Tribunal CESTAT Delhi
Decided On
Reported in(1983)LC703DTri(Delhi)
AppellantSundaram-clayton Ltd.
RespondentCollector of Central Excise
Excerpt:
.....what the appellants describe as "inserts made out of high conductivity copper (chromium copper)". copper rods are purchased from the market and cut into the required sizes and thereafter chamferred, i.e. further processed to give the required inclination to the surface to be used for welding purposes. the supdt. of central excise, madras, after conducting adjudicating proceedings, held that these copper inserts were liable to duty as "welding electrodes" under item no. 50 of the central excise tariff schedule (hereinafter referred to as cet). the appellants filed an appeal before the appellate collector of central excise, madras contending that there was no manufacturing process involved in the conversion of copper rods into copper inserts and that since the copper inserts were not.....
Judgment:
1. This is a Revision Application to the Government of Tridia which, under Section 35P of the Central Excises and Salt Act, 1944, has been transferred to the Tribunal for being disposed of as if it were an appeal presented before it.

2. The goods involved in the present appeal are what the Appellants describe as "inserts made out of high conductivity copper (chromium copper)". Copper rods are purchased from the market and cut into the required sizes and thereafter chamferred, i.e. further processed to give the required inclination to the surface to be used for welding purposes. The Supdt. of Central Excise, Madras, after conducting adjudicating proceedings, held that these copper inserts were liable to duty as "welding electrodes" under Item No. 50 of the Central Excise Tariff Schedule (hereinafter referred to as CET). The appellants filed an appeal before the Appellate Collector of Central Excise, Madras contending that there was no manufacturing process involved in the conversion of copper rods into copper inserts and that since the copper inserts were not consumed in the process of welding they would not be excisable as welding electrodes under the said Item No. 50 of the CET.The Appellate Collector rejected these contentions and the appeal. It is against this order that the Appellants have filed a Revision Application to the Central Government which, as earlier pointed out, stands transferred to this Tribunal for disposal.

3. In the appeal (Revision) it has been urged that cutting into the required sizes of chromium copper rods purchased from the market and chamferring them would not amount to "manufacture" within the meaning of Section 2(f) of the Central Excises and Salt Act (hereinafter referred to as the Act). (Chamferring, according to the Chamber's Dictionary, means to cut or to grind off bevel-wise as a corner, to channel or make furrows upon). Since no new product emerges, even after the copper rods are subjected to the processes referred to above, they continue to be basically copper and retain the essential characteristic of copper like conductivity of heat and electricity. In support of this contention, the appellants relied upon the judgment of the Calcutta High Court in the case of Delhi Cloth & General Mills Ltd. v.Commercial Tax Officer [(1975) 36 STC 575] and the judgment of the Supreme Court in the case of DCM Ltd. v. Union of India [AIR 1963 SC 791]. The appellants further submitted in the absence of any statutory definition of the term "welding electrodes", they would rely on the meaning given to the term "electrodes" given in the handbook of Tool Engineering by Members of ASTME (American Society of Tool and Manufacturing Engineering) 2nd Edition, National Publication Company as "something developed to supply deposited metal for making metal joints in different metals and alloys". From this, the Appellants contend that there should be consumption of electrodes during the process of welding. Reliance by the Appellate Collector of the meaning of electrodes given in the Chamber's Dictionary "as a conductor whereby an electric current is led into" was not proper since in a taxing statute the meaning given to the words in commercial parlance was to be preferred to dictionary meaning, (Avadh Sugar Mills Ltd. v. Sales Tax Officer, AIR 1973 SC 2440). Finally, it was submitted that since the function of the copper inserts was only to conduct a high current to develop the temperature required to fuse the two parent metals and the inserts were not consumed during welding, the duty paid copper bars continued to be classifiable under Item No. 26A CET even after the process of converting them into copper inserts was carried out.

4. Shri R. Parthasarthy, appearing on behalf of the Appellants, besides reiterating the submission contained in the Memorandum of Revision (Appeal) submitted that the impugned goods were known as copper inserts and not as welding electrodes. While admitting that copper inserts were copper electrodes used for welding purposes, he urged that they were nevertheless not welding electrodes since they were not consumed in the process of welding. The process which the appellants carried out in their factory on copper chromium rods purchased from the market constituted only "processing" and not "manufacture" within the meaning of Section 2(f) of the Act.

5. Shri K.D. Tayal, appearing on behalf of the Respondent, submitted that the tariff entry in Item No. 50 CET reads "welding electrodes, all sorts". There was no warrant to suppose that electrodes used for welding purposes, which were not consumed in the process of welding, would not be covered by the said entry. Shri Tayal, however, did not have anything to say in respect of the appellants' contention that the copper inserts were not consumed in the process of welding.

6. We have carefully considered the submissions of both the parties.

The question arising for decision in the present case is the correct classification under the CET of copper inserts made out of copper chromium rods which are used for welding purposes but do not get consumed in the process of welding. Neither the appellants nor the Revenue has cited any authoritative meaning of the expression "welding electrodes'. The appellants contend that welding electrodes must necessarily be consumed in the process of welding. For this, they rely on the meaning of the term "electrodes" as given in the publication of the ASTME. Now, electrodes are of different kinds and used for different purposes. We are concerned here with "welding electrodes".

Item No. 50, CET covers all sorts of welding electrodes. In the absence of any statutory meaning of the expression, we should give the expression its natural meaning, namely, all sorts of electrodes used for or in welding. The impugned copper inserts are admittedly electrodes and they are used in the process of welding. There is no good reason to exclude these from the scope of the tariff entry. Nor is there any force in the appellant's contention that the conversion of copper chromium rods does not amount to "manufacture" within the meaning of Section 2(f) of the Act. Copper rods are, as admitted by the appellants, cut into the required sizes and chamferred, i.e. cut or ground off bevel-wise as a corner. This results in a product known as copper inserts used in the welding machine. In our opinion, there is "manufacture". If these copper inserts are welding electrodes, as we have held, the fact that they may be known in the trade by the description copper inserts and not welding electrodes would not detract from their excisability as welding electrodes under Item No. 50 of the CET. In this view of the matter, the ratios of the judgment cited by the appellants do not, in our opinion, apply to the facts of the present case.


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