1989 (9) TMI 263 - AT - Central Excise

Summary

Issues:
1. Challenge to the correctness of the order-in-appeal by the Revenue.
2. Allegations of contravention of Central Excise Rules against the respondents.
3. Classification of kum kum under Tariff Item 68 and duty exemption claims.
4. Adjudication by the Assistant Collector and subsequent appeals.
5. Dispute over whether repacking constitutes manufacturing activity.
6. Ownership and liability of duty for the goods in question.

Analysis:
1. The Revenue challenged the order-in-appeal by the Collector of Central Excise, Bombay, disputing the correctness of the decision favoring the respondents. The appeals raised common questions of fact and law, leading to a collective judgment.

2. The Superintendent of Central Excise issued show cause notices to the respondents, alleging contraventions of Central Excise Rules, including failure to pay duty, follow prescribed procedures, and provide necessary documentation for the goods manufactured.

3. The respondents contended that they were not engaged in manufacturing but in repacking kum kum received in bulk from another company. They claimed duty exemption under specific notifications based on the number of workers employed and the nature of their activities.

4. The Assistant Collector adjudicated the proceedings, confirming the respondents as manufacturers of kum kum under Tariff Item 68 and upholding the duty demands. However, the Collector of Central Excise, Bombay, ruled in favor of the respondents on appeal, citing exemptions and holding M/s. Ideal Beauty Products liable for duty.

5. The Revenue argued that repacking constituted a manufacturing activity subject to excise duty, emphasizing the change in ownership and the process involved. The respondents maintained that repacking did not amount to manufacturing, as the goods were already fully manufactured by another entity.

6. The Tribunal analyzed whether repacking kum kum from bulk to retail containers qualified as manufacturing. It concluded that the goods were fully manufactured by M/s. Ideal Beauty Products, and repacking did not alter the nature of the product significantly. As a result, the duty liability rested with the original manufacturer, and the appeals by the Revenue were dismissed.

This comprehensive analysis covers the key issues and the Tribunal's decision on each aspect of the case, providing a detailed overview of the legal judgment.