2008 (7) TMI 640 - AT - Central Excise

Summary

Issues: Appeal against Order-in-Appeal on excisability of product based on undervaluation of powder; Whether pulverising polyethylene to powder amounts to manufacture; Jurisdiction of adjudicating authority; Applicability of ITC Ltd. decision.

Analysis:
1. The appeal was filed by the Revenue challenging Order-in-Appeal No. ZBN/46-47/M-VII/2001 dated 30-7-01. The Revenue argued that the issue decided by the Commissioner (Appeals) was not part of the show cause notice. The Revenue contended that the excisability of the product was not in doubt as duty had been paid by the respondent on the pulverised powder. The Revenue further claimed that the Commissioner (Appeals) exceeded the scope of the show cause notice. The Revenue cited the ITC Ltd. v. CCE decision to support its argument.

2. The record revealed that the show cause notice was related to the undervaluation of polyethylene powder cleared to the respondent's unit in Madras. In response, the appellant argued that pulverising polyethylene into powder did not constitute manufacture and, therefore, no duty was payable. The adjudicating authority declined to address the manufacturing process issue, directing the respondent to pursue it with the appropriate authority. The Commissioner (Appeals) concluded that the pulverising process did not amount to manufacture, leading to no emergence of a distinct commercial commodity. The Commissioner (Appeals) allowed the appeal, noting that the respondent had the right to raise any point affecting duty/excisability. The Tribunal concurred with the Commissioner (Appeals) that the respondent was not engaged in manufacturing the product, thus dismissing the appeal.

3. The Tribunal found that the Commissioner (Appeals) had correctly interpreted the situation without any flaws in the decision. The Tribunal emphasized that the issue of manufacturing was crucial in determining the duty/excisability of the product. The Tribunal supported the Commissioner (Appeals) in concluding that the respondent was not involved in manufacturing the product, which rendered the question of undervaluation irrelevant. The Tribunal upheld the decision of the Commissioner (Appeals) and dismissed the appeal, affirming that the issue was consistent with the ITC Ltd. decision.

This detailed analysis of the judgment highlights the key legal arguments, interpretations, and conclusions reached by the Appellate Tribunal CESTAT, MUMBAI in this case involving excisability of a product and the manufacturing process of polyethylene powder.