2004 (2) TMI 400 - AT - Central Excise

Summary

Issues:
1. Discharge of duty on the process of packing 3 items.
2. Interpretation of the process of manufacture in relation to duty payment.

Issue 1 - Discharge of duty on the process of packing 3 items:
The Revenue contested an order where it was held that no duty was required to be discharged on the packing of 3 items as they had already been duty paid. The Commissioner supported this view, relying on various judgments. The Tribunal noted that the activity of packing duty paid products did not amount to a process of manufacture. Citing precedents, it was established that merely ordering goods to be manufactured according to specifications without financial involvement or control over the process did not make one a manufacturer. The Tribunal found that the appellants, after receiving finished products from job workers, engaged in activities like cleaning, dusting, and packing before dispatching to customers. These post-manufacturing activities were not considered manufacturing, leading to the conclusion that no duty was owed on the packed items.

Issue 2 - Interpretation of the process of manufacture in relation to duty payment:
The Tribunal examined the legal position regarding manufacturing activities in detail. It was emphasized that engaging job workers to produce goods based on specifications did not make the party ordering the goods a manufacturer. Various cases were cited to illustrate that factors like quality control, raw material specifications, and packing as per instructions did not alter the manufacturing status. The Tribunal upheld the order vacating the duty demand and setting aside the seizure of goods, stating that the activities post-receipt of finished products did not result in the emergence of a new product in the market. By following the precedent set by the Tribunal in a previous case, the Revenue's appeal was rejected, and the impugned order was upheld.

In conclusion, the judgment clarified that the process of packing duty paid items did not constitute a manufacturing activity requiring duty payment. The decision was based on the understanding that certain post-manufacturing activities, like cleaning and packing, did not transform the products into new commodities. The legal analysis provided a comprehensive interpretation of the concept of manufacturing in the context of duty payment obligations, relying on established precedents to support the final decision.