2017 (9) TMI 772 - AT - Central Excise

Manufacture - Grinding & Mixing of Glass Frit - Dilution & Mixing of Prepared Inorganic Pigments - Dilution & Re-packing of Cover Coats, Lacquer & Media - whether the above processes amounts to manufacture or not? - Held that - Tribunal in the said case law Jayu Products Versus Collector of Central Excise, Bombay 1994 (10) TMI 132 - CEGAT, NEW DELHI has held that if duty paid Ultra Marine Blue was mixed with China Clay as a dilutant then it did not amount to manufacture - In the present case Pigments were mixed with the Silica Powder and therefore, mixing of Pigments with the Silica Powder does not amount to manufacture - demand withheld. The impugned Order-in-Appeal is sustainable in so far as it is related to upholding of demand of Central Excise in respect of repacking of the goods from bulk container of 200 kgs. into 20 kgs, as the process amounted to manufacture. Appeal allowed - decided partly in favor of appellant.

Summary

Issues:
1. Whether the processes of Grinding & Mixing of Glass Frit, Dilution & Mixing of Prepared Inorganic Pigments, and Dilution & Re-packing of Cover Coats, Lacquer & Media amount to manufacture for the purpose of Central Excise duty.
2. Whether the demand of Central Excise duty raised against the appellant is justified.
3. Whether the impugned Order-in-Appeal by the Commissioner (Appeals) is sustainable.

Analysis:
1. The case involved allegations against the appellants for engaging in various processes like Grinding & Mixing of Glass Frit, Dilution & Mixing of Prepared Inorganic Pigments, and Dilution & Re-packing of Cover Coats, Lacquer & Media, which were claimed to amount to manufacture for Central Excise duty purposes. The Original Authority confirmed a demand of &8377; 19,54,785/- and imposed a penalty after holding that these processes constituted manufacture. The Commissioner (Appeals) upheld the demand related to Dilution & Mixing of Prepared Inorganic Pigments and Dilution & Re-packing of Cover Coats, Lacquer & Media, but set aside the demand concerning Grinding & Mixing of Glass Frit, stating that there was no change in the goods' nomenclature, use, or identity. The appellant challenged this decision before the Tribunal.

2. During the appeal, the appellant argued that the mixing of Silica Powder with the Pigments did not amount to manufacture, citing a relevant case law. The Tribunal considered the arguments and held that the mixing of Pigments with Silica Powder did not constitute manufacture, thereby allowing the appeal in this regard. However, regarding the repacking of goods from 200 kgs packs to 20 kgs packs, the Tribunal found that the case law cited by the appellant was not directly applicable to the present situation. The Tribunal differentiated the circumstances and concluded that the impugned Order-in-Appeal upholding the demand for Central Excise duty on repacking from bulk containers was sustainable. Therefore, the appeal was allowed in part.

3. The Tribunal's decision was based on a thorough analysis of the facts, legal provisions, and relevant case laws. The judgment provided a detailed explanation for each process involved and the applicability of the definition of manufacture under the Central Excise Act, 1944. By considering the arguments presented by both parties and referencing pertinent case laws, the Tribunal reached a reasoned conclusion on each issue raised in the appeal. The judgment highlighted the importance of interpreting the law accurately in the context of the specific processes carried out by the appellant, ultimately resulting in a partial allowance of the appeal based on the merits of each process under consideration.