2008 (3) TMI 274 - AT - Central Excise

Commissioner (Appeals) vide his impugned OIA has held that process of dissolving synthetic organic dye in water does not amount to manufacture the other Commissioner (Appeals) has held that such activity amounts to manufacture in view of decision of tribunal in earlier cases held that physical mixture of already standardized formulated and prepared ingredients by dissolving in boiling water not results in new product assessee s appeal allowed

Summary

Issues:
- Classification of the activity of dissolving synthetic organic dye in water as manufacture.
- Interpretation of Tribunal decisions on similar issues.
- Applicability of previous Tribunal decisions on the current case.

Analysis:
1. The judgment by the Appellate Tribunal CESTAT Ahmedabad involved a dispute regarding the classification of the activity of dissolving synthetic organic dye in water as manufacture. The case revolved around two appeals, one filed by the Revenue and the other by the assessee, with differing views from two Commissioners (Appeals) on whether such an activity amounts to manufacture.

2. The appellants were engaged in selling Liquid Blue obtained by dissolving Iragon Bright Violet Powder in tap water, arguing that this process does not constitute manufacture based on a previous Tribunal decision in the case of Jyoti Laboratories. However, one Commissioner (Appeals) relied on a different Tribunal decision in the case of C.M.C. (India) to assert that such activity does amount to manufacture.

3. The Tribunal, after considering both sides, referred to the precedent set in the case of Jyoti Laboratories, where it was established that dissolving standardized ingredients in boiling water does not result in the emergence of a new product and hence does not involve manufacturing activity. This previous decision was deemed conclusive in the current case.

4. The Tribunal distinguished the case of C.M.C. (India) by noting that it did not involve a dispute on "manufacture" but rather on the classification of the product. As a result, the Tribunal concluded that the decision in the C.M.C. (India) case did not address the issue of manufacture, making the decision in the Jyoti Laboratories case the applicable precedent.

5. Ultimately, the Tribunal ruled in favor of the assessee based on the precedent set in the Jyoti Laboratories case, allowing the appeals filed by the assessee and rejecting those filed by the Revenue. This decision was reached after a thorough analysis of relevant Tribunal decisions and the specific facts of the case.

This detailed analysis of the judgment provides a comprehensive understanding of the issues involved and the Tribunal's reasoning in arriving at its decision.