2014 (8) TMI 131 - AT - Central Excise

Manufacture activity or not - activity of filling up of duty paid resin into duty paid plastic container - resin chamber falling under CETH 8421 21 90 and 8421 21 10 - Held that - the resin is filled into a plastic container and the emerging product HP resin chamber is part of the water filter and as a distinct identity character and use. - therefore, prima facie case is against the assessee. Product is marketable or not - Held that - In the absence of a sale of the product and in the absence of any evidence of marketability of the product, in terms of definition of goods and in terms of requirements of Section 3 for charging Central Excise duty, whether the Department has a case or not, in our opinion, requires further consideration. Further it was also submitted that the product is exempt from payment of duty under Notification No.25/2008-CE also requires consideration by the Commissioner. Since the amount involved is small, the learned counsel submitted that he has no objection to deposit this amount if the matter is being remand for fresh consideration - assessee directed to make pre-deposit of duty - matter remanded back for fresh decision.

Summary

Issues:
1. Whether filling up of duty paid resin into duty paid plastic container amounts to manufacture.
2. Whether the product is marketable.

Analysis:
1. The appeal was filed against the demand for central excise duty, penalty, and interest imposed by the Commissioner on the grounds that the appellants manufactured 'resin chamber' without paying duty. The appellants argued that filling resin into a plastic container does not constitute manufacturing. However, the Tribunal disagreed, stating that the resin chamber is a distinct part of the water filter with specific character and use, thus rejecting the appellants' submission.

2. The issue of marketability was raised, with the appellants claiming that the product was not marketable as there was no evidence of its sale in the market. The Tribunal noted the absence of proof of sale and considered the transfer of the product between units. It was concluded that the marketability issue required further examination, especially in light of the appellants' claim of exemption under Notification No.25/2008-CE, which was not previously considered by the Commissioner. The matter was remanded for fresh consideration by the Commissioner, with the appellants directed to deposit a specified amount within eight weeks.

Overall, the Tribunal found that filling resin into a plastic container to create the resin chamber constituted manufacturing and raised doubts about the marketability of the product, necessitating further review by the Commissioner. The appellants were required to deposit a specific amount pending the fresh consideration of the case.