1999 (11) TMI 292 - AT - Central Excise

Summary

Issues:
Appeal against Order-in-Original confirming duty and penalty - Whether activities amounted to manufacture under Section 2(f) of the C.E. Act, 1944 - Whether bonafide belief existed to avoid invoking the extended period for demand.

Analysis:
1. Manufacture under Section 2(f) of the C.E. Act, 1944:
The appellant argued that they subcontracted the manufacture of a conveyor assembly system through job workers, and the system was assembled and tested at their factory after supply of electrical equipment. The appellant contended that no new goods emerged at their premises, hence no duty was payable. The respondent highlighted that the assembly and testing of the full conveyor system at the appellant's factory, along with warranty obligations, constituted manufacture. The Tribunal found merit in the respondent's argument as the appellant's activities involved assembling the full system, testing, and finishing it for marketability, thus falling within the definition of manufacture under Section 2(f) of the C.E. Act, 1944.

2. Bonafide Belief and Limitation:
The appellant claimed a bonafide belief to avoid the extended period for demand, citing a lack of conscious effort in providing information to the investigating authority. However, the respondent pointed out instances where the appellant acknowledged non-compliance with excise formalities and failed to cooperate in providing necessary details. The Tribunal held that the appellant's actions did not reflect a bonafide belief, especially considering the lack of cooperation with the investigating authority. Consequently, the Tribunal dismissed the appeal, upholding the Order-in-Original confirming duty and penalty.

In conclusion, the Appellate Tribunal CEGAT, MADRAS, in the cited judgment, upheld the Order-in-Original confirming duty and penalty on the appellant. The Tribunal determined that the activities undertaken by the appellant constituted manufacture under Section 2(f) of the C.E. Act, 1944, as they involved assembling, testing, and finishing the conveyor assembly system for marketability. Additionally, the Tribunal rejected the appellant's claim of a bonafide belief to avoid the extended period for demand, citing the appellant's lack of cooperation with the investigating authority.