2010 (5) TMI 362 - AT - Central Excise

SSI Exemption - denied on the ground that the Appellant was manufacturing packed drinking water with the brand name of other manufacturer - manufacturing drinking water and water is purified and this process does not amount to manufacture, as per the provisions of Section 2(f) of the Central Excise Act - Appellant never informed the Revenue by filing any declaration or any other communication in regard to the activity of manufacturing or clearing the packed drinking water with the brand name of another person Held that - no merit in any of the contentions of the Appellant. The Appeal is, therefore, dismissed.

Summary

Issues:
- Benefit of small-scale exemption Notification
- Definition of 'manufacture' under Central Excise Act
- Time-barred demand for duty

Benefit of small-scale exemption Notification:
The Appellant appealed against the denial of the benefit of small-scale exemption Notifications due to manufacturing packed drinking water under a brand name belonging to another entity. The Appellant argued that they were only purifying water, not manufacturing, and hence eligible for the exemption. However, the Tribunal found that processes like filtration and purification of water constitute manufacturing under Chapter Note-2 of the Central Excise Tariff. The Tribunal noted the use of the brand name of another entity disentitles the Appellant from the exemption, as per Notification No. 8/2000-C.E. The judgment cited a Supreme Court decision emphasizing that even using part of a brand name could lead to disentitlement from exemption. Consequently, the Tribunal dismissed the Appellant's claim for exemption.

Definition of 'manufacture' under Central Excise Act:
The Appellant contended that their process of purifying water did not amount to 'manufacture' as per Section 2(f) of the Central Excise Act. However, the Tribunal referred to Chapter Note-2 of Chapter-22 of the Central Excise Tariff, which specifies that processes like filtration, purification, or repacking constitute manufacturing. The Tribunal detailed the purification process undertaken by the Appellant, including filtration through various filters and ozonation, concluding that the process indeed amounts to 'manufacture' under the Act.

Time-barred demand for duty:
Regarding the time-barred demand for duty, the Appellant claimed that the Revenue was aware of their activities, making the demand unsustainable. However, the Tribunal found that the Appellant never informed the Revenue about manufacturing or clearing packed drinking water under another entity's brand name. Consequently, the Tribunal rejected the contention that the demand was time-barred, emphasizing the lack of communication from the Appellant to the Revenue. Ultimately, the Tribunal dismissed the Appeal, upholding the demand for duty and interest.

This comprehensive analysis of the judgment highlights the key issues addressed by the Appellate Tribunal CESTAT, Kolkata, providing detailed insights into the legal reasoning and conclusions reached on each matter presented before the Tribunal.