2016 (11) TMI 781 - AT - Central Excise

Process amounting to manufacture - supply of carline and body side pillar - the activity of Punching Notching Bending in case of carline as well as edge bending in case of Body Side Pillars - job work - Held that - after doing Punching Notching Bending out of the raw material namely blank supplied by Rail Coach Factory and that can be used as part of the Rail Coach Factory. Therefore on merits we find that the activity undertaken by the appellant amounts to manufacture. On the basis of that clarification it is doubtful whether the activity undertaken by the appellant amounts to manufacture or not. In that circumstance the benefit of doubt goes in favour of the appellant. Consequently we hold that the extended period of is not invokable as the show cause notice was issued in this case on 3.1.2002 by invoking the extended period of limitation for the period 1996-1997. In that circumstance the show cause notice is barred by limitation. We further find that if the extended period is to be taken into account then also some art of the period five years. As we have already held that the extended period of limitation is not invokable in the circumstances the impugned order is set aside and the appeal is allowed with consequential relief if any.

Summary

Issues involved:
- Interpretation of whether certain activities amount to manufacture under Chapter note 6 of Section XVII of Central Excise Tariff Act, 1985.
- Applicability of extended period of limitation for issuing show cause notice.

Analysis:

1. Interpretation of Manufacturing Activity:
The appellant argued that activities like Punching, Notching, and Bending do not result in the creation of new products, thus not amounting to manufacture. They relied on a letter from the Assistant Collector supporting this stance. On the contrary, the Revenue contended that these activities fall under Chapter note 6 of Section XVII of the Central Excise Tariff Act, 1985, constituting manufacture. The Tribunal examined the activities undertaken by the appellant, such as processing raw materials supplied by the Rail Coach Factory. After reviewing the relevant legal provisions, the Tribunal concluded that the appellant's activities indeed amounted to manufacture as per Chapter note 6.

2. Applicability of Extended Period of Limitation:
The appellant argued against invoking the extended period of limitation for issuing the show cause notice, emphasizing that the issue involved interpretation rather than deliberate non-disclosure. The Revenue, however, maintained that the extended period was rightly invoked due to the appellant's failure to disclose their activities. The Tribunal considered a clarification provided by the Assistant Collector, which raised doubts about whether the appellant's activities constituted manufacture. Consequently, the Tribunal ruled in favor of the appellant, holding that the extended period of limitation was not applicable. As a result, the show cause notice issued beyond the statutory limitation period was deemed barred by limitation, leading to the setting aside of the impugned order and allowing the appeal with consequential relief.

In conclusion, the Tribunal's judgment clarified the interpretation of manufacturing activities under the Central Excise Tariff Act, 1985, and addressed the issue of the extended period of limitation for issuing show cause notices. The decision favored the appellant, emphasizing the importance of legal interpretations and statutory limitations in such cases.