2005 (3) TMI 507 - AT - Central Excise

Summary

Issues:
1. Whether the process of making mosquito repellant mats with diluted insecticides amounts to manufacture.

The appeal before the Appellate Tribunal CESTAT, CHENNAI involved the question of whether the process of manufacturing mosquito repellant mats using diluted insecticides constitutes "manufacture" for the purpose of Central Excise duty. The appellant, M/s. Godrej Hi Care Ltd, contended that pouring diluted insecticides on paper mats does not result in a new product with a distinct name, character, or use. The appellant's argument was supported by references to legal precedents where similar processes were not considered as manufacturing activities. However, the respondent argued that the process transforms the paper mats into mosquito repellant mats, creating a new commodity with different characteristics. The Tribunal analyzed the submissions and referred to the Supreme Court's decision in UOI v. Delhi Cloth and General Mills Co. Ltd. & Others Mills, establishing that manufacture occurs when a new distinct commodity emerges. The Tribunal concluded that in this case, the process undertaken by the appellant resulted in the creation of mosquito repellant mats, a new product with a different name, character, and use. Therefore, the Tribunal held that the process amounted to manufacture, making the appellant liable for Central Excise duty, and consequently, the appeal was dismissed.

This judgment highlights the essential legal principle that for an activity to qualify as "manufacture" under Central Excise law, it must result in the emergence of a new product with a distinct name, character, or use. The Tribunal emphasized that the complexity of the process is irrelevant; what matters is the creation of a new commodity. The decision underscores the importance of analyzing the transformation brought about by the process to determine whether it amounts to manufacture. The reference to legal precedents and the Supreme Court's rulings provided a solid legal foundation for the Tribunal's decision, ensuring consistency and adherence to established legal principles in resolving the issue at hand.