2015 (8) TMI 196 - SC - Central Excise

Duty demand - cutting of the conveyor belting into required sizes - Manufacturing activity or not - Held that - Decision of the CESTAT does not call for any interference. Mere cutting of the lengthy conveyor belt into smaller sizes would not amount to manufacture, ipso facto, unless it is shown that as a result of the said cutting, it was transferred into a new product which was a marketable product. Revenue has failed to bring out these aspects. We, therefore, are of the opinion that the matter is squarely covered by the judgment of this Court in Servo-Med Industries Pvt. Ltd. v. Commissioner of Central Excise, Mumbai 2015 (5) TMI 292 - SUPREME COURT - Decided against Revenue.

Summary

Issues:
Whether cutting of conveyor belting into required sizes amounts to manufacture for the purpose of duty imposition.

Analysis:
The Supreme Court addressed the issue of whether cutting conveyor belting into required sizes constitutes manufacture for duty imposition. The Customs, Excise and Service Tax Appellate Tribunal (CESTAT) had previously ruled that such cutting activities do not amount to manufacture. The Court agreed with this decision, emphasizing that mere cutting of the conveyor belt does not automatically qualify as manufacturing unless it results in a new marketable product. The Court highlighted that the Revenue failed to demonstrate how the cutting transformed the product into something new and marketable. The judgment referenced a prior case, 'Servo-Med Industries Pvt. Ltd. v. Commissioner of Central Excise, Mumbai,' to support this conclusion. Ultimately, the Court dismissed the appeals, upholding the CESTAT's decision that cutting conveyor belting into smaller sizes does not amount to manufacture for duty imposition.