1994 (4) TMI 179 - AT - Central Excise

Summary

Issues:
1. Whether repacking duty paid aluminium paste into containers exceeding 4 litres for use as aluminium paint constitutes 'manufacture' and attracts duty.
2. Interpretation of Note 2 to Section VI of the Central Excise Tariff Act, 1985 regarding classification of goods put up in sets.
3. Assessment of repacked aluminium paste as 'aluminium paint' along with separately manufactured medium.
4. Examination of relevant documents to determine excisability and marketing pattern of the disputed goods.

Analysis:
1. The case involves the question of whether repacking duty paid aluminium paste into containers exceeding 4 litres for use as aluminium paint amounts to 'manufacture' and attracts duty. The appellants argued that repacking does not constitute manufacture as they only repackage duty paid aluminium paste acquired from other manufacturers. The Tribunal noted that if the appellants were receiving orders solely for aluminium paint and not selling aluminium paste separately, repacking could be considered incidental to manufacturing.

2. The interpretation of Note 2 to Section VI of the Central Excise Tariff Act, 1985 was crucial. The appellants contended that Note 2 only pertains to classification of goods in sets and does not define a process constituting 'manufacture.' The Tribunal agreed that Note 2 does not specify a process but considered repacking as ancillary to manufacturing if orders were solely for aluminium paint.

3. The assessment of repacked aluminium paste as 'aluminium paint' along with separately manufactured medium was disputed. The Respondents argued that the repacking should be deemed 'manufacture' under the legal fiction of Note 2 to Section VI. However, the Tribunal emphasized the need to examine relevant documents like orders, invoices, and other records to determine if repacking was incidental to manufacturing.

4. The lower authorities were criticized for not thoroughly examining the excisability of the goods based on the marketing and invoicing pattern of the appellants. The Tribunal found a lack of proper consideration of facts and directed a remand to the Assistant Collector for a reevaluation considering the observations made in the order. The adjudicating authority was instructed to provide the appellants with a personal hearing before making a decision.

Conclusion:
The Tribunal allowed the appeal by remanding the matter for readjudication, emphasizing the need for a detailed examination of relevant documents and a proper application of the law. The decision highlighted the importance of determining whether the repacking of aluminium paste constituted 'manufacture' based on the specific circumstances and orders received by the appellants.