2003 (7) TMI 374 - AT - Central Excise

Summary

Issues:
1. Whether embossing and cutting to shape of duty paid paper backed aluminum foils amounts to manufacture, resulting in the emergence of new products chargeable to duty?
2. Whether the Tribunal's decision in a previous case under the erstwhile Central Excise Tariff Act is applicable in the present case?
3. Whether the Revenue has established that a new product emerges as a result of embossing and cutting to shape, and that the products are marketable?

Analysis:
1. The case involved a dispute where the Revenue contended that embossing and cutting to shape of duty paid paper backed aluminum foils by the respondent constituted manufacture, resulting in new products chargeable to duty. The Assistant Commissioner upheld the duty demands, but the Commissioner (Appeals) set aside the order, relying on a Tribunal's decision in a previous case. The Tribunal noted that the Revenue failed to establish the emergence of new products distinct from plain foils or their marketability. Citing relevant case laws, the Tribunal held that no manufacturing had occurred, and even if embossing was considered manufacturing, the respondent would be entitled to Modvat credit. Consequently, the Tribunal rejected the Revenue's appeal, affirming the Commissioner's decision.

2. The Revenue argued that the Tribunal's reliance on a previous decision under the erstwhile Central Excise Tariff Act was misplaced. However, the Tribunal emphasized that the test of manufacture must be satisfied in the present case, regardless of the tariff entry. Referring to a Supreme Court decision, the Tribunal highlighted that the mere classification under a tariff entry does not imply manufacture. The Revenue failed to provide evidence of a new product emerging from embossing and cutting, thereby failing to prove manufacture and marketability. The Tribunal distinguished a case involving cotton fabrics to emphasize the Revenue's failure to demonstrate the creation of new marketable commodities in the present case.

3. The Tribunal concluded that the Revenue did not meet the burden of proving the emergence of new marketable products through embossing and cutting of aluminum foils. By highlighting the lack of evidence regarding distinct products, the Tribunal upheld the Commissioner's decision. The Tribunal emphasized the importance of demonstrating the manufacturing process and the marketability of resulting products to establish duty liability. As the Revenue failed to provide such evidence, the Tribunal found no grounds to interfere with the lower authority's decision and rejected the Revenue's appeal.

In summary, the Tribunal ruled in favor of the respondent, holding that embossing and cutting to shape of duty paid aluminum foils did not amount to manufacture of new products chargeable to duty. The decision was based on the lack of evidence presented by the Revenue to establish the emergence of distinct and marketable products, thereby upholding the Commissioner's decision and rejecting the Revenue's appeal.