2000 (2) TMI 142 - AT - Central Excise

Summary

Issues:
1. Whether the process undertaken by the appellants amounts to manufacture of a new and distinct product.
2. Applicability of Supreme Court judgments in similar cases.
3. Relevance of Trade Notice and legal provisions in determining the manufacturing process.
4. Comparison with a Supreme Court judgment regarding distinct commodities.
5. Consideration of the specific use of the products in question.

Analysis:
1. The judgment revolves around the question of whether the process carried out by the appellants constitutes the manufacture of a new and distinct product. The Commissioner held that the decorated ceramic glazed tiles were distinct from general plain glazed tiles and confirmed duty payment, confiscation of goods, and imposed penalties. However, the Tribunal, after considering arguments and relevant precedents, found that the process did not result in the creation of a separate commercial commodity, aligning with the two-fold test established by the Supreme Court.

2. The Tribunal extensively analyzed the Supreme Court judgment in the case of Union of India v. J.G. Glass Industries Ltd., which set a precedent for determining whether a process amounts to 'manufacture.' The Court emphasized that for a process to be considered manufacturing, it must result in the creation of a different commercial commodity or render the original commodity commercially useless without the process. Applying this test, the Tribunal concluded that the basic character of the tiles did not change through the decoration process.

3. The Tribunal also considered the relevance of a Trade Notice and legal provisions in the context of determining manufacturing activities. While acknowledging specific provisions in the Central Excise Tariff, the Tribunal highlighted that the principles established in the J.G. Glass Industries Ltd. judgment remained applicable even before certain legal amendments. This analysis reinforced the Tribunal's decision regarding the manufacturing nature of the process in question.

4. In contrast to another Supreme Court judgment regarding distinct commodities, the Tribunal distinguished the case at hand by emphasizing that the decorated tiles retained their original purpose and character even after the decoration process. This comparison further supported the Tribunal's conclusion that the process did not amount to manufacturing a new and distinct product.

5. The Tribunal also considered the specific use of the products in question, drawing parallels with a case involving cotton-flocked fabrics. The observation that the tiles retained the same purposes before and after decoration further solidified the Tribunal's decision that the process undertaken by the appellants did not result in the creation of a new commercial commodity. Consequently, the Tribunal allowed the appeal on merits, providing consequential relief to the appellants.