2002 (8) TMI 209 - AT - Central Excise

Summary

Issues:
- Whether the process undertaken by M/s. SKB Dry Fruits Marketing Co. P. Ltd. amounts to manufacture.

Analysis:
The appeals revolve around the issue of whether the activities carried out by the company constitute manufacturing. The Appellant's representative argued that the processes undertaken do not result in the emergence of a new product, emphasizing that the goods remained nuts and were not known by any other name in trade. Additionally, they contended that the processes for wheat dalia and rice flips did not amount to manufacturing as they involved simple grinding and passing through an extruder. The Appellant highlighted their payment of duty as evidence of good faith and referenced a previous legal decision to support their case.

In response, the learned SDR argued that the character of the products changed due to the processing undertaken by the company, citing relevant provisions from the Central Excise Tariff. It was emphasized that the Central Excise duty was not paid on the goods in question, warranting penalties. The SDR defended the redemption fine imposed, stating it was appropriate given the value of the goods.

Upon considering the submissions, the Tribunal noted that the processes undertaken by the Appellants transformed the raw materials into different commercial commodities, satisfying the criteria for manufacturing as established by legal precedents. The Tribunal found the classification of products under Heading 20.01 appropriate and upheld the duty of excise being chargeable. Additionally, it was observed that the Appellants had not followed Central Excise procedures and had not obtained registration, justifying the confiscation of seized goods and the redemption fine. However, recognizing the prompt payment of duty after the Central Excise officer's visit, the Tribunal deemed the penalty imposed on the company excessive and reduced it to Rs. 50,000. The penalty on the Director was set aside based on the belief held by the company regarding the manufacturing process.

In conclusion, the Tribunal ruled in favor of the Revenue, affirming that the processes undertaken by the company constituted manufacturing. The Tribunal upheld the duty of excise being chargeable, the confiscation of goods, and the redemption fine while reducing the penalty imposed on the company and setting aside the penalty on the Director.