2013 (4) TMI 106 - AT - Central Excise

Manufacture Criteria - Waiver of pre-deposit - Demand of duty/interest /penalty - process of printing and slitting of cork tipping paper on job work basis from large jumbo roll of the base paper - amounts to manufacture or not - Held that Relying on the judgement of Apex Court in C.C.E., New Delhi-I v. S.R. Tissues Pvt. Ltd. reported in 2005 (8) TMI 111 - SUPREME COURT OF INDIA and in Tribunal in its own decision in same matter RGL Convertor v. C.C.E., New Delhi 2003 (3) TMI 157 - CEGAT, NEW DELHI . Based on this tribunal accordingly, dispense with the condition of pre-deposit of duty demand, interest and penalty for hearing of appeal and stay the recovery thereof. Stay application is disposed of.

Summary

Issues:
Whether the process of printing and slitting of cork tipping paper on a job work basis amounts to manufacture?

Analysis:
The appellant, M/s. RGL Converter, filed an appeal against the order confirming the demand of excise duty, interest, and penalty imposed by the Commissioner for the period 1-4-2005 to 31-3-2006. The main issue for consideration was whether the process of printing and slitting of cork tipping paper on a job work basis constitutes manufacturing. The appellant argued that a previous Tribunal decision in their favor established that this process does not amount to manufacture, citing a High Court order dismissing the Department's appeal due to a limitation issue. The appellant sought dispensation of the pre-deposit condition based on this precedent.

The Revenue, represented by Shri R.K. Verma, contended that the process of slitting and printing to produce PCT cigarette paper creates a new product classified under Chapter Heading 4813 of the Central Excise Tariff Act, 1985. The Revenue argued that the previous Tribunal decision relied upon by the appellant was not applicable due to subsequent amendments in the Tariff Act, specifically classifying PCT cigarette paper under Chapter Heading 48.13. Therefore, the Revenue urged for the dismissal of the stay application.

Upon review of the arguments, the Tribunal noted that in previous proceedings between the parties, it was established that the process of printing and slitting cork tipping paper does not amount to manufacturing. The Tribunal emphasized that the Department failed to present any new evidence suggesting that the process now constitutes manufacturing. Referring to relevant legal precedents, including a Supreme Court decision, the Tribunal reaffirmed that a mere mention of a product in a tariff heading does not automatically imply that the process amounts to manufacturing. Consequently, the Tribunal found in favor of the appellant, waiving the pre-deposit condition of duty demand, interest, and penalty for the appeal hearing, thereby staying the recovery.

In conclusion, the Tribunal granted the appellant's request for waiver of the pre-deposit condition, allowing the appeal to proceed without the need for immediate payment of duty demand, interest, and penalty. The appeal was scheduled for further proceedings.