2010 (12) TMI 1043 - HC - Central Excise

Whether re-glass lining of old vessels amounts to manufacture or not - Tribunal has not appreciated the fact that the goods once returned to the respondent s factory are subjected to glass lining and without this essential process their commodity has no commercial/marketable value inasmuch as either the goods returned have to be scrapped or re-manufactured - in the case of Shriram Refrigeration Industries (2008 -TMI - 48413 - HIGH COURT OF JUDICATURE FOR ANDHRA PRADESH AT HYD) held that the question as to whether any process undertaken by a manufacturer amounts to manufacture or not and if the goods produced during that process are excisable or not would fall within the meaning of the expression determination of rate of duty of excise or the value of the goods for the purposes of assessment of duty used in Section 35G(1) and Section 35L(b) of the Act appeal involves determination of a question relating to the rate of duty of excise or value of goods for the purposes of assessment would lie before the Supreme Court and not before this Court appeal dismissed as not maintainable

Summary

Issues:
- Appeal against judgment under Section 35G of the Central Excise Act, 1944
- Whether re-glasslining of machinery and equipment amounts to manufacture as per Section 2(f) of the Act
- Maintainability of the appeal based on precedent regarding determination of duty rate and excisability

Analysis:
1. The appellant challenged a judgment by the Tribunal, arguing that the re-glasslining process on goods changed their commercial value, constituting manufacture under Section 2(f) of the Act. The appellant contended that the Tribunal overlooked findings by lower authorities and misapplied relevant legal definitions. The appellant emphasized that the goods' re-glasslining process altered their original state, thus meeting the criteria for manufacturing. The appellant sought to establish a substantial question of law for admission of the appeal.

2. The respondent countered the appeal's maintainability, citing a precedent from the Andhra Pradesh High Court. The respondent argued that the issue of whether a process amounts to manufacture and if the goods produced are excisable falls under the determination of duty rate or value of goods for assessment purposes, as per Section 35G(1) and Section 35L(b) of the Act. Relying on the Andhra Pradesh High Court decision, the respondent asserted that the appeal did not fall within the jurisdiction of the current court.

3. Upon hearing both parties and reviewing the Tribunal's reasoning, the Court delved into the nature of the appellant's business involving glasslined vessels and re-glasslining old equipment. The appellant maintained that re-glasslining did not amount to manufacture under Section 2(f) of the Act, contrary to the stance taken by the authorities. The Tribunal, after considering arguments and relevant judgments, ruled in favor of the respondent, stating that re-lining old cylinders did not constitute manufacturing. Consequently, the Tribunal set aside previous orders and granted relief to the respondent.

4. The Court concurred with the Andhra Pradesh High Court's interpretation that issues related to determining excise duty rates or goods' excisability fall within the purview of higher courts. Given that the appeal questioned whether re-glasslining qualified as manufacturing, which directly impacted duty assessment, the Court deemed the matter beyond its jurisdiction. Consequently, the Court dismissed the appeal on grounds of maintainability, aligning with the precedent set by the Andhra Pradesh High Court.

By analyzing the judgment in detail, it is evident that the Court's decision hinged on the interpretation of the law regarding manufacturing processes and the jurisdictional scope of appeals concerning duty determination and goods' excisability. The Court's alignment with precedent and nuanced understanding of legal definitions shaped the outcome, ultimately leading to the dismissal of the appeal.