2009 (8) TMI 937 - AT - Central Excise

Summary

The Appellate Tribunal CESTAT AHMEDABAD, in the 2009 (8) TMI 937 - CESTAT AHMEDABAD citation, was presided over by Ms. Archana Wadhwa and Shri B.S.V. Murthy, JJ. The delay in filing the appeals by 32 days was attributed to a mix-up of files at the advocate's office, which was condoned by the tribunal. A demand of duty amounting to Rs. 4,06,067 was confirmed against the appellant, along with an equal penalty, on the basis that white paint cleared by them from their factory to their depots underwent the process of "tinting" at the depots, resulting in the manufacture of a new product. The appellant argued that the base white paint they were selling independently was excisable, and the mere addition of colorants did not constitute manufacture. Moreover, the tinting process occurred at the depots, not the factory premises. The demand was also challenged on grounds of limitation, as the show cause notice was issued in April 2008 for the period 2003-2004 to December 2007. After hearing the arguments, the tribunal found merit in the appellant's contentions. It was observed that the base white paint was independently marketable, and the addition of colorants did not constitute a further manufacturing process. The tribunal also acknowledged the plea of time bar. Consequently, the tribunal dispensed with the pre-deposit condition for the duty and penalty amounts, staying the recovery during the appeal's pendency. The order was dictated and pronounced in court.