2016 (10) TMI 1168 - AT - Central Excise

Levy of duty - packing of biris in aluminum foils with the aid of power - manufacture or not? - Held that - The SCN has not brought the reason why such activity shall first amount to manufacture and then thereafter dutiable - The packing was not from bulk pack into retail pack in the present case. There was no adoption of any treatment made to render the goods marketable. Accordingly, activity of packing biris in aluminum foil shall not amount to manufacture which is only a post-manufacturing activity and shall not make it liable to higher rate of duty - appeal allowed.

Summary

Issues:
1. Whether the activity of packing biris in aluminum foil with the aid of power is liable to duty at a higher rate.
2. Whether the post-manufacturing activity of packing biris in aluminum foil amounts to manufacture and attracts duty.

Issue 1:
The appellant argued that biris manufactured without the aid of power should be liable to duty at a lower rate under Heading 2404.31 of the Central Excise Tariff Act, 1985. However, the Revenue contended that packing biris in aluminum foils with the aid of power should be dutiable. The adjudication considered the activity of packing with power as dutiable without providing a clear reason for its classification as manufacture and subsequent duty liability.

Issue 2:
Upon reviewing the facts, it was found that the biris were initially manufactured at a lower duty rate as suggested by the appellant's counsel. The subsequent packing in aluminum foil was analyzed in light of Chapter Note 2, which did not apply as there was no repacking from bulk to retail or any treatment to make the goods marketable. The judgment referenced cases like ITC Ltd. v. Collector of Central Excise, Patna and Deputy Commissioner of Central Excise, Siliguri v. Kishan Biri Mfg. Co. to establish that post-manufacturing activities like packing should not attract a higher duty rate. Consequently, the activity of packing biris in aluminum foil was deemed a post-manufacturing process and not liable for a higher duty rate.

In conclusion, the appellate tribunal ruled in favor of the appellant, allowing the appeal based on the finding that the activity of packing biris in aluminum foil with the aid of power did not amount to manufacture and should not attract a higher rate of duty. The judgment highlighted the distinction between manufacturing and post-manufacturing activities, citing relevant legal precedents to support the decision.