2005 (6) TMI 466 - AT - Central Excise

Summary

Issues:
1. Whether the activity carried out by the appellants amounts to manufacture under the Central Excise Act 1944.
2. Whether the appellants are liable to pay duty for the specified periods.
3. Whether the claim of the appellants for payment made under protest should be rejected.
4. Whether the amount already paid by the appellants should be demanded under section 11A.

Analysis:
1. The appellants, a proprietor of a firm named M/s Metro Shoes, were in appeal against an order directing the levy and payment of duty on unbranded footwear received from cobblers at a godown, labeled, packed, and dispatched to showrooms. The appellants argued that their activity of labeling goods did not amount to manufacture under the amended definition. The Commissioner held the activity as manufacture and imposed duty for specific periods. The Tribunal found that the appellants' activity fell under the amended definition involving packing, labeling, and rendering goods marketable, thus upholding the duty levy based on evidence and admissions by the appellants and others involved.

2. The Tribunal considered the amended definition of manufacture under section 2(f) of the Central Excise Act, which includes packing, labeling, and making goods marketable. The Tribunal noted that the appellants' activity of receiving loose goods, checking, marking with MRP, logo, and bar code, and packing in unit containers constituted manufacture under the amended definition. Previous cases cited by the appellants were deemed irrelevant as they did not involve packing from loose merchandise into unit containers. The Tribunal upheld the duty levy for shoes packed from loose receipts, distinguishing them from already packed cases with labels only.

3. The Tribunal addressed the claim of payment made under protest by the appellants, which was to be rejected as the activity was deemed as manufacture under the Central Excise Act. The appellants' argument that labeling goods did not change their marketability or identity was dismissed, and the duty payment under protest was upheld as valid based on the activity being classified as manufacture.

4. Regarding the amount already paid by the appellants, the Tribunal directed the matter back to the Commissioner to grant abatements if proof of shoes being received in unit containers was provided. The Tribunal allowed the appeal on the condition of granting abatements upon satisfying the Commissioner with evidence of receiving goods in unit containers, thereby ensuring a fair assessment of duty liability.

In conclusion, the Tribunal upheld the duty levy on the appellants' activity of packing, labeling, and making goods marketable under the amended definition of manufacture, while providing an opportunity for abatements upon proper documentation of goods received in unit containers.