1998 (9) TMI 164 - AT - Central Excise

Summary

Issues involved: Challenge to Commissioner (Appeals) order allowing removal of inputs u/r 57F(2) of Central Excise Rules for further processing to job workers.

Summary:
The Revenue challenged the Commissioner (Appeals) order allowing M/s. Rolls Prints (Packaging) Ltd. to remove inputs under Rule 57F(2) of the Central Excise Rules for further processing to job workers. The Respondents sought permission to send Printed Paper/Paper Board to job work for cutting, creasing, stripping, and gluing. The Assistant Collector initially rejected permission, stating that the final product should return to the Applicant's factory for further use, and that the printed paper/board had not been declared as inputs under Rule 57G. On appeal, the Commissioner (Appeals) set aside the Assistant Commissioner's order, emphasizing that paper and paper board were not declared inputs, and the printed shells became finished goods only after inspection, counting, and packing at the applicant's factory.

During the proceedings, the Respondents did not appear despite notice. The Revenue argued that ink and glue were not semi-finished goods and objected to the extension of Rule 57F(2) benefits to the Respondents. They contended that inspection, counting, and packing were not manufacturing processes as the goods did not require precision instruments and only minimal packing was needed for transport.

Upon review, it was found that Rule 57F(2) allowed the removal of inputs for further processing outside the factory. The Respondents' application to send printed paper/Board for processing was deemed valid, even if glue was not explicitly mentioned as an input. The argument that glue and ink were not semi-finished goods was dismissed, as the rule permitted the removal of inputs as such. The necessity of inspection, counting, and packing was acknowledged as part of the manufacturing process, as manufacturers ensure quality before final product release. The definition of manufacture under Section 2(f) of the Central Excise Act includes processes incidental to product completion. The Supreme Court precedent highlighted that packing for market sale is integral to manufacturing. Therefore, the Respondents met the Rule 57F(2) requirements, utilizing inputs in the final product manufacture. The appeal by the Revenue was rejected, upholding the Commissioner (Appeals) decision.