2014 (1) TMI 218 - AT - Central Excise

Process amounts to manufacture or not Waiver of Pre-deposit Held that - The applicants are engaged in the manufacture of Biris without the aid of power except the process of packing of Biris into pre-printed blastic sheets with the aid of power Following CCE, Bolpur vs. Hindustan Biri Mfg.Co. 2007 (3) TMI 106 - CESTAT, KOLKATA the process of packing with aid of power could not result into manufacture of Biris with the aid of power - The implication of the amendment would be considered at the time of disposal of the Appeal - the applicant are able to make out a prima facie case for total waiver of pre-deposit of duty Duty waived and recovery stayed till the disposal Stay granted.

Summary

Issues:
1. Waiver of pre-deposit of duty amounting to Rs.6,67,000.
2. Interpretation of the amendment to Chapter Note 3 to Chapter 24 regarding labeling or re-labeling of containers from bulk packs to retail packs as a process of manufacture.

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Issue 1: Waiver of Pre-deposit of Duty
The appellant, engaged in manufacturing Biris without the aid of power, sought waiver of pre-deposit of duty amounting to Rs.6,67,000. The appellant argued that the process of packing Biris into pre-printed plastic sheets with the aid of power should not be considered as manufacturing with the aid of power. Reference was made to previous Tribunal judgments supporting this argument. The respondent, however, contended that the recent amendment to Chapter Note 3 to Chapter 24, effective from 01.03.2008, treated labeling or re-labeling of containers from bulk packs to retail packs as a manufacturing process. The appellant maintained that their process constituted primary packing and not from bulk packs to retail packs, hence the amendment was not applicable.

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Issue 2: Interpretation of Amendment to Chapter Note 3
The Tribunal, after hearing both sides and examining the records, found that the appellant was indeed engaged in manufacturing Biris without the aid of power, except for the process of packing Biris into pre-printed plastic sheets with the aid of power. Citing previous judgments, the Tribunal held that packing with the aid of power did not amount to manufacturing with the aid of power. The Tribunal acknowledged the implications of the recent amendment but decided that it would be considered at the time of appeal disposal. Consequently, the Tribunal granted a total waiver of pre-deposit of duty and stayed the recovery during the pendency of the appeal, allowing the stay petitions.

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In conclusion, the Tribunal granted the appellant's request for waiver of pre-deposit of duty based on the prima facie case presented, emphasizing that the process of packing Biris with the aid of power did not constitute manufacturing with the aid of power as per previous judgments. The Tribunal also noted the relevance of the recent amendment to Chapter Note 3, which would be further examined during the appeal proceedings.