2009 (3) TMI 1005 - AT - Central Excise

Summary

Issues involved: Determination of whether the process of electroplating and lacquering on imitation jewellery amounts to manufacturing under Chapter 71 of the Central Excise Act, 1944.

Summary:
The case involved a dispute regarding whether the process of gold plating on imitation jewellery constitutes manufacturing. The appellants were engaged in job work of gold plating on jewellery items made of mild steel, copper, and brass. The revenue contended that the process resulted in the emergence of a new article, while the appellants argued that no new product was created, and the process was merely for ornamentation.

The Tribunal considered the arguments presented by both sides and examined the impugned orders. The issue was framed as to whether electroplating and lacquering on base metal articles amounted to manufacturing under Chapter 71 of the Central Excise Act, 1944. The original adjudicating authority held that the process undertaken by the appellants transformed the imitation jewellery into a different marketable product, thereby constituting a manufacturing process.

In its analysis, the Tribunal referred to precedents such as the case of Commissioner of Central Excise, Mumbai v. Clad Material Systems, where it was held that electroplating, which does not result in the emergence of a new commodity, does not amount to manufacturing. Similarly, in CCE, Bangalore v. Divya Cases, it was observed that plating of watch cases did not amount to manufacturing as the cases were marketable without such plating.

The Tribunal distinguished the case from the decision in Hawkins Cookers Ltd. v. State of Kerala, emphasizing that the issue before the Supreme Court in that case was different. It relied on the Allahabad High Court judgment in Swan Bangle Stores v. Assistant Sales Tax Officer to support its conclusion that ornamentation of jewellery does not result in the creation of a new commercial commodity.

Ultimately, the Tribunal found that the gold plating carried out by the appellants was for ornamentation purposes only, and no new product emerged from the process. Therefore, based on the settled law and precedents, the Tribunal accepted the appellants' contention and allowed the appeal, setting aside the impugned order.

*(Pronounced in Court on 2-3-09)*