2013 (10) TMI 1092 - AT - Central Excise

Activity Manufacture or Not SSI Exemption Notification No. 08/02 and 08/03 - Waiver of Pre-deposit - Revenue was of the view that transferring the oil from bulk to retail packs and affixing the brand name of the customer would result into manufacture under Section 2(f) of the Central Excise Act, 1944 r.w Note 4 of Chapter 15(2003-04, 2004-05) of the First Schedule to the Central Excise Tariff Act, 1985 Held that - Prima facie the Appellant are engaged in the process of re-packing of refine edible oil from bulk to retail packs and affixing the brand name of the customer - the Applicant, though claimed SSI exemption, but the same was not considered by the lower authorities - The issue whether packing/repacking would amount to manufacture, is a debatable one and the ld. Commissioner (Appeals) is directed to decide the issue on merits - while remanding the matter to the ld. Commissioner (Appeals), the Appellant should be put to terms - In these circumstances, the Appellant is directed to deposit 25% of the duty - a reasonable opportunity of hearing be granted to the Appellant - all issues are kept open - Appeal allowed by way of remand.

Summary

Issues: Application for waiver of pre-deposit of duty and penalty under Section 11AC of the Central Excise Act, 1944.

Analysis:
1. The appellant, a trading firm engaged in re-packing of edible oils, sought waiver of pre-deposit of duty and penalty. The Commissioner dismissed their appeal for failure to comply with the pre-deposit directive.
2. The appellant disputed that the process of re-packing constituted manufacturing under Section 2(f) of the Central Excise Act, 1944. They also claimed entitlement to the Small Scale Industries (SSI) exemption.
3. The Revenue accepted that the Commissioner did not decide the case on merits.
4. The Tribunal found that the appeal could be disposed of without further delay. They directed the Commissioner to decide the issue on merits, emphasizing that the appellant must deposit 25% of the duty within twelve weeks. Compliance would enable the Commissioner to proceed with the case without additional pre-deposit requirements.
5. The Tribunal clarified that all issues remained open, and they had not expressed any views on the merits of the case. The appeal was allowed for remand, with the stay petition being disposed of.