2008 (6) TMI 457 - AT - Central Excise

Summary

Issues Involved:
Whether repacking Talc powder into small packs with a brand name amounts to manufacture or not.

Analysis:
The case involves the confirmation of duty demand, interest, and penalty by the Commissioner (Appeals) regarding the repacking of Talc powder into 1 kg packs with the brand name "Sika Noleek." The applicants argued that since Talc Powder is non-excisable, repacking does not constitute manufacture, citing various legal precedents. They emphasized that no evidence of chemical change was provided in the Show Cause Notice (SCN) and that the process is not listed in the 3rd Schedule to the Central Excise Tariff Act, 1985. They also contended that the issue primarily revolves around labeling and not manufacturing, and that the activity was disclosed to the Department in 2003, making the extended period not applicable.

Upon examination, the Tribunal considered whether the conversion of Talc Powder into the final product "Sika Noleek" constitutes manufacture. The product literature described "Sika Noleek" as a waterproofing concentrate and mortar admixture, indicating a distinct product with specific characteristics and uses. The Tribunal noted that the applicants themselves acknowledged the manufacturing process by indicating the Manufacturing date on the packs. Despite the applicants' reliance on case laws, the Assistant Commissioner and the Commissioner (Appeals) found the process to amount to manufacture, aligning with Supreme Court judgments. The Tribunal concluded that the product falls under Chapter Heading 38244010 and that the applicability of case laws would be considered during the final hearing.

Furthermore, the Tribunal reviewed a letter from the applicants to the Superintendent in 2003, where they claimed that repacking Talc is not manufacturing under Chapter 2505. However, the presence of Manufacturing dates on the packs indicated a discrepancy in their declaration to the Department, potentially justifying the application of the extended period of limitation. As the applicants did not establish a strong case for complete waiver, they were directed to pre-deposit a specified amount towards duty within six weeks, with the remaining balance subject to waiver pending appeal disposal.

In conclusion, the stay petition was disposed of with specified conditions, and compliance was required to be reported by a certain date.