2000 (11) TMI 552 - AT - Central Excise

Summary

Issues Involved: Appeal against duty demand and penalty imposition on the respondents for manufacturing wax washers without payment of excise duty.

Summary:
The appeal was filed by the Revenue against the order in appeal passed by the Commissioner (Appeals) which reversed the duty demand and penalty imposed on the respondents for manufacturing wax washers without paying excise duty. The respondents contested the show cause notice by claiming that the process of melting duty paid paraffin wax and creating wax washers did not amount to manufacturing a new product. The Assistant Commissioner upheld the duty demand and penalty, but the Commissioner (Appeals) reversed this decision, stating that the process did not constitute manufacturing and that the duty demand was time-barred.

The main issue in question was whether the process of melting paraffin wax and creating wax washers by the respondents constituted a manufacturing process. The definition of "manufacture" was discussed, emphasizing the transformation of materials into a different form for new uses. Citing legal precedents, the judgment highlighted the criteria for determining manufacturing processes, including the emergence of a new commercial commodity and a distinct change in the original article's character, name, or use.

The Tribunal concluded that the process adopted by the respondents did not amount to manufacturing as the basic character of the wax remained the same, with only a change in shape for convenience in using it with winding machines. The judgment affirmed the Commissioner (Appeals)' decision that the wax washers were not a dutiable manufactured product. Additionally, the Tribunal upheld the finding that the demand was time-barred as the extended period under Section 11A of the Central Excise Act was not justified in the absence of allegations of fraud, collusion, or intentional suppression in the show cause notice.

Ultimately, the appeal filed by the Revenue was dismissed as the Tribunal found no merit in challenging the Commissioner (Appeals)' decision, thereby affirming the non-dutiable status of the wax washers and the time-barred nature of the demand.