2014 (6) TMI 126 - AT - Central Excise

Process that amount to manufacture or not - cutting and slitting of jumbo rolls or log rolls of self adhesive rolls of Chapter 48 and 85 - Held that - cutting and slitting of a product from jumbo rolls into smaller sizes would not amount to manufacture. In S.R. Tissues Pvt. Ltd s case 2005 (8) TMI 111 - SUPREME COURT OF INDIA , it is also held that the value addition cannot be a criterion for concluding that whether a new product has emerged or not with a distinct character, name or use. There is a third schedule to the Central Excise Tariff Act, wherein a large number of items have been listed and in respect of these items, the activity of labeling, relabeling, packing or re-packing or adoption of any other treatment to render them marketable are deemed as manufacture under Section 2(f) of the Act. CETH 4811 and 8546 have not been specified in the said Schedule even though similar products falling under CETH 4816, 4818, 8536, 8539, etc. figure in the said Schedule. If the legislature intended the process of cutting and slitting to be amounting to manufacture, then CETH 4811 and 8546 should also have been included in the said Schedule. Further, in various Chapter Notes in the Tariff, wherever the legislature intended cutting and slitting to be amounting to manufacture , specific notes were provided. In the present case, in respect of CETH 4811 and 8546, no such Chapter Note exists. All these points to the fact that the legislature did not intend to treat cutting and slitting of jumbo rolls of products falling under 4811 and 8546, to smaller sizes so as to make them useable by the user as amounting to manufacture - Decided against Revenue.

Summary

Issues:
- Whether cutting and slitting of jumbo rolls of self adhesive rolls amount to 'manufacture' under Central Excise laws?

Analysis:
The appeal challenged an Order-in-Original passed by the Commissioner of Central Excise & Customs, Belapur Commissionerate, which held that the cutting and slitting of jumbo rolls of self adhesive rolls did not amount to 'manufacture.' The appellant argued that the process resulted in a new commodity with distinctive characteristics, citing a Supreme Court decision where a similar process was considered 'manufacture.' The Revenue contended that substantial value addition and the use of capital goods indicated a manufacturing activity. However, the respondent argued that a previous Tribunal decision and Supreme Court rulings established that such processes did not constitute 'manufacture.'

The Tribunal examined various legal precedents, including decisions by the Supreme Court and the Tribunal itself, regarding similar processes involving cutting and slitting of different materials. It was noted that the value addition alone could not determine the emergence of a new product with distinct characteristics. The Tribunal also highlighted that certain items in the Central Excise Tariff Act were deemed as 'manufacture' under Section 2(f) of the Act, but the specific products in question were not included in this list. The absence of specific Chapter Notes indicating cutting and slitting as 'manufacture' for the relevant products further supported the conclusion that the legislative intent did not consider these processes as 'manufacture.'

Based on the legal and factual analysis, the Tribunal concluded that cutting and slitting of jumbo rolls into smaller sizes did not amount to 'manufacture' under Central Excise laws. The Revenue's appeal was dismissed for lacking merit.