2016 (10) TMI 28 - AT - Central Excise

Manufacture - Nature of activity - iron /steel articles subjected to various processes like cutting, bending, punching and making holes - proprietor admitted that articles are manufactured by them - invoices clearly state that the goods supplied after cutting and drilling etc. resulting in emergence of completely different products - Held that - it is found that the impugned order is specific and categorical on the factual issue. There is no material evidence to contradict the factual finding by the lower authority that activity can not be treated as manufacturing and no excise duty is leviable on it. - Decided against the Revenue

Summary

Issues:
Nature of activity carried out by the respondent - Whether cutting and making holes on purchased M.S. Angles/ Channels amounts to manufacture.

Analysis:
The Revenue appealed against the order of the Commissioner (Appeals) regarding the confirmation of Central Excise duty and penalty imposed on the respondent firm engaged in manufacturing and trading activities. The Revenue contended that the duty demand could be confirmed based on the proprietor's admission that articles are manufactured by them. Additionally, they argued that the goods supplied after cutting and drilling resulted in completely different products. However, the respondent did not appear during the proceedings. The Tribunal examined the grounds of appeal and found that the impugned order was specific and categorical on the factual issue of whether cutting and making holes on purchased M.S. Angles/ Channels amounted to manufacture. The Tribunal referred to a circular by CBEC clarifying that such activities do not amount to manufacture. Citing a Supreme Court case, the Tribunal emphasized that the clarification issued by the Board is binding on the Department. As there was no evidence to suggest that the activities resulted in a new article, the Tribunal dismissed the Revenue's appeal, upholding the lower authority's finding that the activities in question did not constitute manufacturing.

This judgment primarily revolves around the interpretation of whether certain activities, such as cutting and making holes on purchased iron/steel articles, constitute manufacturing for the purpose of Central Excise duty. The Tribunal analyzed the grounds raised by the Revenue and the relevant circulars issued by CBEC to determine the nature of the activities in question. The decision underscores the importance of evidence and the binding nature of clarifications issued by the Board in such matters. The Tribunal's ruling provides clarity on the distinction between mere processing activities and actual manufacturing processes, emphasizing the need for tangible evidence to establish the emergence of a new commercially different product.