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2012 (4) TMI 157 - AT - Central ExciseAppeal by Department that the paper used for packing material was sent to job workers for the purpose cutting and printing of labels with the aid of machines, used to wrap the Biris - proposing classification of the biris manufactured by them under Chapter Sub-heading 2404.39 which attracted higher rate of duty - The respondents are manufacturers of Hand-made Labeled Biris falling under Chapter 24 of the CESTA, 1985 under Chapter Sub-heading 2404.31 - Held that - the paper used for wrapper and label the aid of machines by the job worker did not make the biris as manufactured with the aid of machines Mangalore Ganesh Bidi Works vs. CCE, Mangalore 2007 - TMI - 2202 - CESTAT, BANGALORE and clarified by Board in their Circular No. 840/17/2006-Cx dated 6.12.2002 appeal of revenue rejected.
Issues: Classification of hand-made labeled biris under Chapter 24 of the CESTA, 1985 - Whether biris manufactured with the aid of machines or not - Higher rate of duty - Interpretation of Notification No. 179/77-C.E. dated 18.6.77 - Applicability of Tribunal decisions - Board Circular No. 840/17/2006-Cx dated 6.12.2002.
Analysis: 1. Common Facts and Legal Issues: The appeals before the Appellate Tribunal CESTAT, Bangalore involved the classification of hand-made labeled biris falling under Chapter 24 of the CESTA, 1985. The respondents classified the biris under Chapter Sub-heading 2404.31, treating them as hand-made biris manufactured without the aid of machines. 2. Department's Allegations: The department issued show-cause notices proposing to classify the biris under Chapter Sub-heading 2404.39, attracting a higher rate of duty. The notices were contested by the assessee, claiming that all processes, including labeling and packing, were done manually without the aid of machines. 3. Tribunal's Analysis: The Tribunal considered the activities of cutting and printing labels with the aid of machines by job workers. It referenced previous decisions to establish that such activities did not make the biris as manufactured with the aid of machines. Notable decisions cited included Standard Fireworks Industries vs. Collector of Central Excise, Madurai and Ajanta Sada Biri Co. vs. CCE, Calcutta-II. 4. Interpretation of Notification: The Tribunal distinguished the present case from the context of Notification No. 179/77-C.E. dated 18.6.77, emphasizing that the manufacturing of biris was without the aid of machines. It highlighted that only the packing materials and labels were manufactured by job workers with machines, making them the manufacturers of those components. 5. Board Circular: The Tribunal referred to Circular No. 840/17/2006-Cx dated 6.12.2002, which clarified the classification of biris manufactured without the aid of machines under Tariff item No. 2403 1031, even if labels/wrappers were made with machine assistance by job workers. 6. Decision: After considering submissions and records, the Tribunal rejected the department's appeals, concluding that the biris were hand-made without the aid of machines. The decision aligned with previous Tribunal rulings and the Board's circular, supporting the classification of the biris under the lower duty rate category. 7. Operative Portion: The order's operative portion was pronounced in open court on 12.3.2012, affirming the rejection of the department's appeals based on the classification of hand-made labeled biris without the aid of machines.
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