2006 (12) TMI 282 - AT - Central Excise

Summary

Issues Involved:
1. Whether repacking standard packets of Soda Ash into smaller packets amounts to manufacture under Note 10 of Chapter 28 of the Central Excise Tariff Act, 1985?
2. Whether the process of repacking enhances marketability and falls under the definition of manufacture as per the relevant notes to the chapters?
3. Whether the appellant is required to pre-deposit the specified amount and penalty imposed under Section 11AC?

Analysis:

Issue 1:
The appellant was required to pre-deposit a substantial sum along with interest, and a penalty was imposed for repacking standard packets of Soda Ash into smaller packets. The Revenue argued that this repacking constitutes manufacture under Note 10 of Chapter 28. The appellant's advocate contended that repacking from standard packets to smaller packets does not amount to manufacture, citing various case laws, including Amritlal Chemaux Ltd. v. CCE, Mumbai-IV. The advocate emphasized the distinction between bulk pack and standard pack, asserting that since there was no repacking from bulk pack to retail pack, Note 10 was not applicable, and the process did not amount to manufacture. The Tribunal agreed with the appellant, citing the Buns case, and waived the pre-deposit of the entire amount pending appeal disposal.

Issue 2:
The Tribunal considered whether the process of repacking enhanced marketability and fell under the definition of manufacture. Referring to the Buns case, it was held that enhancement of marketability by repacking is not covered by the deemed definition of manufacture under Note 7 to Chapter 21, similar to Note 10 to Chapter 28. The Tribunal found that since the appellant already received Soda Ash in marketable condition in standard packets, repacking only a small percentage into smaller packets did not amount to manufacture. The Tribunal concurred with the appellant's argument that Note 10 applied to repacking from bulk pack to smaller packets, not from standard packets to retail packets.

Issue 3:
Regarding the pre-deposit requirement and penalty imposed under Section 11AC, the Tribunal, after considering the arguments and case laws presented by the appellant's advocate, ruled in favor of the appellant. It was noted that the process undertaken by the appellant did not amount to manufacture, and thus, the Tribunal ordered the waiver of pre-deposit of the entire amount of duty, penalty, and interest until the appeals were disposed of.

This detailed analysis of the judgment highlights the key issues, arguments presented by both parties, relevant case laws cited, and the Tribunal's decision and reasoning for each issue involved in the legal dispute.