2000 (6) TMI 472 - AT - Central Excise

Summary

Issues:
1. Whether the process of converting fines into briquettes amounts to manufacture for classification under Central Excise Tariff.
2. Whether the activity undertaken by the respondent results in the production of concentrated fine ores.
3. Interpretation of HSN Explanatory Notes and relevant legal precedents in determining the manufacturing process.
4. Application of Rule 57(F) regarding job work provisions.

Analysis:
1. The appeal concerns whether the conversion of fines into briquettes constitutes manufacturing for classification under the Central Excise Tariff. The process involves receiving ore fines from a holding company and adding lime powder and molasses as binding agents to create briquettes. The Commissioner (Appeals) ruled that this activity does not amount to manufacture based on references to HSN Explanatory Notes and legal precedents. The Revenue challenged this decision, arguing that the process should be classified as concentrates leviable to duty.

2. The dispute revolves around whether the activity results in the production of concentrated fine ores. The Commissioner (Appeals) found that no foreign material was removed during the process, indicating that the basic requirement for concentration was not met. The respondent contended that they only mixed the fines with binding agents without removing foreign materials, aligning with the HSN Explanatory Notes. Legal precedents were cited to support the argument that the process does not amount to manufacture under the Central Excise and Salt Act, 1944.

3. The interpretation of the HSN Explanatory Notes and legal precedents played a crucial role in determining the manufacturing process. The Commissioner (Appeals) emphasized the removal of foreign materials as a key aspect of concentration, which was not observed in the respondent's process. References to previous decisions highlighted that the definition of manufacture under Section 2(f) remained consistent, supporting the conclusion that no excise duty could be levied unless the activity resulted in a manufactured product.

4. Additionally, the application of Rule 57(F) regarding job work provisions was considered. The respondent claimed that they were covered by this rule due to the value reversal with the holding company. However, since the Tribunal held that the process did not amount to manufacture, a detailed examination of Rule 57(F) was deemed unnecessary, leading to the rejection of the Revenue's appeal and disposal of the Cross objection.

In conclusion, the Tribunal upheld the Commissioner (Appeals) decision that the process of converting fines into briquettes did not amount to manufacture, based on the lack of foreign material removal and alignment with the HSN Explanatory Notes. The legal precedents and consistent interpretation of manufacturing criteria under the Central Excise and Salt Act, 1944, supported this ruling, leading to the rejection of the Revenue's appeal and the disposal of the Cross objection.