2016 (11) TMI 570 - AT - Central Excise

Process amounting to manufacture or not - assembling activity - importing parts of photocopier and thereafter procuring some indigenous parts assembled photocopier machine and clearing the same without payment of duty - Held that - As the respondents are procuring some indigenous parts of photocopier machine and assembled the same in their factory. Therefore we hold that the activity undertaken by the respondent amount to manufacture. The next issue is whether the respondent is manufacturing branded goods or not? We have seen that photocopier machine which the respondent is importing are already branded and the appellant is not affixing any brand name during the course of manufacture of the same. In that view we hold that the respondent cannot be denied the benefit for SSI Exemption notification in the light of the decision of this Tribunal in the case of Texind Corporation Pvt Ltd 2000 (11) TMI 550 - CEGAT MUMBAI . The respondents are not liable to pay duty - appeal dismissed - decided against Revenue.

Summary

Issues:
Whether the activity of importing parts of photocopiers, assembling them, and clearing them without duty payment amounts to manufacture? Whether the respondent is manufacturing branded goods? Whether the respondent is entitled to the benefit of the SSI Exemption notification?

Analysis:
The case involved the question of whether importing parts of photocopiers, assembling them, and clearing them without duty payment constitutes manufacturing. The Revenue contended that the respondent's activity amounted to manufacture, triggering duty payment obligations. The matter was adjudicated, and it was initially held that the respondent's activity did amount to manufacture of branded goods, thus disqualifying them from the SSI Exemption notification benefit. However, the Ld. Commissioner (A) later ruled that the activity did not amount to manufacture, leading to the Revenue's appeal.

Upon hearing arguments from both sides, the Tribunal determined that the respondent's activity did amount to manufacture since they were procuring indigenous parts and assembling photocopier machines. The crucial issue of whether the respondent was manufacturing branded goods was also addressed. It was noted that the photocopier machines being imported were already branded, and the respondent did not affix any brand name during the manufacturing process. Citing precedents, the Tribunal held that the respondent could not be denied the benefit of the SSI Exemption notification based on the lack of affixing a brand name during manufacturing.

The Tribunal referenced previous cases to support its decision, highlighting that the burden to prove the use of another person's brand name rested with the Revenue. Moreover, a circular by the Board emphasized that where materials were supplied with a brand name, the small scale exemption should not be denied. Consequently, the Tribunal found no fault in the Commissioner (Appeals)'s view and concluded that the respondent was not liable to pay duty as per the adjudication order. Ultimately, the appeal filed by the Revenue was dismissed as lacking merit.

In conclusion, the Tribunal upheld that the respondent's activity constituted manufacturing but clarified that they were not manufacturing branded goods, thereby entitling them to the benefit of the SSI Exemption notification. The judgment emphasized the importance of brand name affixation during the manufacturing process in determining eligibility for exemption notifications.