2004 (2) TMI 623 - AT - Central Excise

Summary

Issues:
1. Eligibility of Modvat credit denied on Acids received in bulk in tankers by the appellants which were purified, filtered, and packed for export.
2. Whether the activity of purification, filtration, and packing in carboys amounts to manufacture.
3. Determining excisability based on the percentage of Sulphuric acid in the acid.
4. Whether new identifiable/marketable goods emerged due to the operations conducted by the appellants.

Analysis:

1. The judgment deals with the eligibility of Modvat credit denied to the appellants for acids received in bulk in tankers, purified, filtered, and packed for export. The issue revolves around whether the activities of purification, filtration, and packing constitute manufacturing, thereby affecting the entitlement to Modvat credit.

2. The Tribunal considered the precedent set by the Larger Bench in a previous case, emphasizing that even spent sulphuric acid produced as a by-product during the manufacturing process is dutiable. The percentage of Sulphuric acid in the acid was deemed irrelevant for excisability, as the acid's nature as Sulphuric acid was not contingent on a specific percentage.

3. The absence of a finding in the order regarding the emergence of a new identifiable or marketable commodity post-operations conducted by the appellants was highlighted. Citing established legal principles, the judgment emphasized that even if goods belong to the same entry, manufacturing occurs if a new marketable product emerges. The nature of technology used was deemed irrelevant in determining manufacturing, as evidenced by previous cases such as Laminated Packagings Ltd. and Indian Aluminium.

4. Ultimately, the Tribunal allowed the appeal, indicating that the appellants were entitled to the Modvat credit in question. The decision was based on the findings that the operations conducted resulted in the emergence of new marketable goods, aligning with the legal principles surrounding manufacturing and the entitlement to Modvat credit.

This comprehensive analysis of the judgment provides a detailed overview of the issues addressed and the Tribunal's decision regarding the eligibility of Modvat credit and the determination of manufacturing activities in the context of the case.