2001 (6) TMI 282 - AT - Central Excise

Summary

Issues:
1. Whether the assembly and erection of food processing units at the customer's site amounts to manufacture under Central Excise Act?
2. Whether the emerged food processing line is marketable goods and eligible for excise duty?
3. Jurisdictional aspects related to the assembly of the food processing machinery.

Analysis:
1. The appellant argued that the assembly and erection of food processing units at the customer's site do not constitute manufacturing as it does not create a new marketable product. They relied on legal precedents emphasizing the marketability test for dutiability. The Supreme Court's decision in Triveni Engineering case was cited to support the argument that the emergence of a processing line does not result in a new product eligible for excise duty.

2. The respondent contended that the assembly process results in the creation of a distinct, excisable product. They referred to the Sirpur Paper Mills case to support their position. However, the tribunal disagreed with this reasoning, emphasizing that dismantling the food processing line would reveal separate machines and equipment, not a single marketable product. The judgment in Triveni Engineering case was deemed applicable, highlighting the distinction between the final product and its components.

3. The tribunal considered the jurisdictional aspect of the assembly process and concluded that the food processing line is not eligible for excise duty. The decision was based on the immovability of the processing line and its inability to be moved to another location in the same condition. Consequently, the appeal filed by the appellant was allowed, while the appeal filed by the revenue was rejected as it became irrelevant after the primary issue was resolved.

This detailed analysis of the judgment highlights the arguments presented by both parties, the legal precedents cited, and the tribunal's reasoning in arriving at the decision regarding the assembly and marketability of the food processing line under the Central Excise Act.