2017 (8) TMI 776 - AT - Central Excise

Manufacture - job-work - printing of information - whether the process amounts to manufacture? - Held that - There is no manufacture in mere printing of information and this is settled law and there is no change in the product after the printing is carried out and the process cannot be said to be manufacture - The appellants were engaged in the activity of printing on paper certain instructions for use of goods which would be wrapped therein for the surgical gloves made by a 100% EOU i.e., M/s. Kemwell International Ltd. and the paper so printed was folded by the buyer of the same and the buyers (i.e., EOU) puts their goods therein. The raw materials M. G. Paper and ink were supplied by the 100% EOU. So their activity is considered as job work up to March 2000 and not manufacture - demand withheld - appeal dismissed - decided against Revenue.

Summary

Issues:
- Appeal against the Commissioner's order setting aside the Order-in-Original and allowing the appeal of the assessee.
- Whether the process of printing paper wallets amounts to manufacture under the Central Excise Act, 1985.

Issue 1: Appeal against Commissioner's Order:
The Revenue filed two appeals against the Commissioner's order setting aside the Order-in-Original and allowing the appeal of the assessee. The case involved the evasion of Central Excise duty by manufacturing and removing excisable goods on a job work basis without payment of duty. The assessee changed the pattern of transactions with a company and started sending paper wallets on sale basis after previously doing job work. The Additional Commissioner confirmed the duty demand along with penalty and interest. The Commissioner (A) set aside the Order-in-Original, stating that there was no manufacture in mere printing of information, which was supported by the assessee's submissions and relevant case laws. The Revenue contended that the impugned order was not sustainable in law and wrongly applied the Supreme Court's decision in a related case.

Issue 2: Manufacturing of Paper Wallets:
The crux of the issue was whether the process of manufacturing paper wallets, specifically the printing of information on them, amounted to "manufacture" under the Central Excise Act. The Commissioner (A) held that the process did not amount to manufacture, citing relevant provisions and case laws. The assessee argued that they were engaged in job work for another company, and even if considered manufacturers, the printed paper wallets should be classified differently, attracting a nil rate of duty. The Commissioner (A) emphasized that there was no change in the product after printing and that the process did not constitute manufacture. The Tribunal upheld the impugned order based on the precedents cited and dismissed the Revenue's appeals.

In conclusion, the Tribunal upheld the Commissioner's order, stating that the process of printing paper wallets did not amount to manufacture under the Central Excise Act, 1985. The decision was based on the consideration of relevant facts, submissions from both parties, and binding precedents.