2016 (9) TMI 234 - HC - Central Excise

Manufacture - Whether under the facts and circumstances of the case, labelling and packing of handmade Biri in printed plastic wrappers with the aid of power operated machine to bring into existence retail pack , having brand name, meant for ultimate consumer, comes within the purview of the definition of manufacture as defined in Section 2(f) of the Central Excise Act, 1944. Held that - packing or re-packing of goods is also included by the legislature within the manufacturing activity in respect of the goods specified in the Third Schedule. Admittedly, biri is an item, which has been kept in the First Schedule. Therefore, it is more than clear that the legislature has made a distinction as to in which cases packing or repacking is an activity which can be included to be construed as in aid of manufacture of the item. When the legislature itself has made a distinction, there is no reason why any separate meaning could be given to that. Therefore, no substantial question of law is involved and we refuse to admit the appeal. - Revenue s appeal dismissed

Summary

Issues:
Whether packing of 'handmade Biri' in printed plastic wrappers with the aid of a power-operated machine to create 'retail pack' falls under the definition of 'manufacture' as per Section 2(f) of the Central Excise Act, 1944.

Analysis:
The advocate for the revenue argued that packing handmade Biri in pre-printed wrappers using a machine for sale as pouch/sachet is a manufacturing process as it is incidental to the completion of the product. However, the court disagreed, stating that packing cannot be considered incidental or ancillary to manufacturing. The definition of 'manufacture' in Section 2(f) of the Act includes processes incidental to the completion of a product, specified processes in relation to goods, and packing or repacking of goods in certain cases.

The court highlighted that the legislature has specifically included packing or repacking of goods as a manufacturing activity for goods specified in the Third Schedule. As Biri is listed in the First Schedule, the distinction made by the legislature regarding when packing or repacking can be considered part of the manufacturing process is clear. Therefore, the court concluded that since the legislature has made this distinction, there is no basis for interpreting it differently.

In light of the above analysis, the court found no substantial question of law involved in the case and subsequently dismissed the appeal.