2002 (10) TMI 584 - AT - Central Excise

Manufacture - PVC/PE sheets emerge at the intermediate stage of the manufacture of separator for the battery

Summary

Issues:
1. Exigibility of PVC/PE sheets and Lead Alloy to Central Excise Duty.

Analysis:
The appeal filed by M/s. Exide Industries Ltd. raised the issue of whether PVC/PE sheets and Lead Alloy manufactured by them are subject to Central Excise Duty. The Appellant's Advocate argued that the manufacturing process of lead alloy from pure lead and antimony does not constitute a new commodity, citing relevant case law and tariff classifications. The Advocate also highlighted the applicability of Note 5 to Section XV of the Schedule to the Central Excise Tariff Act, emphasizing that the process undertaken by the Appellants does not amount to manufacture. Additionally, the Advocate contended that the PVC sheets emerging during the separator manufacturing process are not marketable products, referencing previous decisions and the absence of essential packaging for marketability.

Regarding the manufacturing process of separators and the emergence of PVC/PE sheets, the Appellant's Counsel explained the differences in the manufacturing stages and argued that certain sheets do not reach a marketable form due to the lack of essential packaging. The Counsel relied on legal precedents to support the claim that the sheets are not excisable goods. The Counsel also pointed out previous decisions and orders in the Appellant's favor, emphasizing that the sheets are not classified as PVC/PE sheets and are not subject to duty based on the findings of the Commissioner (Appeals).

In response, the Respondent's Advocate argued that the impugned sheets are marketable and that the process of making lead alloy from lead constitutes manufacturing, leading to the emergence of a new product. The Tribunal considered the arguments from both sides and addressed two main issues. Firstly, it was determined that the process of creating lead alloy from lead did not result in a new commodity and therefore was not subject to excise duty, aligning with previous case law and tariff classifications. Secondly, it was established that PVC/PE sheets did emerge during the manufacturing process of separators and were chargeable to excise duty, contrary to the Appellant's claims. However, the Appellants were granted eligibility to avail Modvat credit on specified duty paid inputs used in the manufacturing process, provided proper documentation was produced. In conclusion, the penalty imposed on the Appellants was set aside, and the appeal was disposed of accordingly.