2001 (6) TMI 246 - AT - Central Excise

Summary

Issues Involved:
The issues involved in this case are the proper filing of appeals based on Orders-in-Original, whether the conversion of technical material into formulation amounts to manufacture under Section 2(f) of the Central Excise Act, and the retrospective effect of legislative changes on the classification of products.

Proper Filing of Appeals:
The Revenue filed an appeal against Order-in-Appeal No. 39, 40 & 41/97(CBE), dated 10-2-1997, which was restricted to the Order-in-Original dated 13-6-1995. The Tribunal's practice at the time was to file appeals based on the number of show cause notices, but it later changed to filing based on Orders-in-Original. As there was only one Order-in-Original in this case, the appeal was considered properly filed.

Conversion of Technical Material into Formulation:
The department initiated proceedings against the respondents for levying duty on the process of converting technical material into formulation, claiming it amounted to manufacture. The assessee argued that dilution of basic pesticidal chemicals did not constitute manufacture under Section 2(f) of the Central Excise Act. The Commissioner, considering precedents and a Trade Notice, upheld the assessee's contention that the process did not result in a new product with distinct characteristics, and thus, no manufacture was involved. The Tribunal concurred, citing previous judgments and legislative changes, and allowed all three appeals.

Retrospective Effect of Legislative Changes:
The Revenue argued that changes in the Budget of 1996 clarified the process as manufacture with retrospective effect. However, the Tribunal held that legislative changes cannot always be considered clarificatory and should be treated as new legislation. As the changes were intended to be operative from the date of passing the legislation, the contention that they had retrospective effect was rejected. The Tribunal found no infirmity in the order and rejected the Revenue's appeal accordingly.