2015 (2) TMI 875 - AT - Central Excise

Manufacture - Whether the process of cutting of carpet matting in rolls and stitching the edges and providing a lining to the cut sizes, to facilitate use as floor mats, amounts to manufacture and the emerging product is exigible to excise duty Held that - cutting of carpet rolls into smaller sizes and subjecting such cut sizes to a process of stitching linings at the edges would not amount to manufacture nor result in emergence of a distinct independent commodity, exigible to duty under provisions of Section 2(f) of the Central Excise Act, 1944 - Following decision of Assessee's own previous case 2013 (12) TMI 79 - CESTAT CHENNAI - Decided in favour of assessee.

Summary

Issues Involved:
Conversion of 'Nylon Tufted Carpet Mats' into floor mats and car mats - Whether it amounts to manufacture.

Analysis:

The judgment by the Appellate Tribunal CESTAT Chennai focused on the issue of whether the conversion of 'Nylon Tufted Carpet Mats' in rolled forms into floor mats and car mats would amount to manufacture. The Tribunal examined the process involved, where the carpet mats purchased in roll forms are cut into different sizes and shapes. Subsequently, the edges of the mats are stitched with velvet lining through job workers, resulting in the emergence of floor mats or car mats.

The Tribunal, in this appeal, referred the matter to the Larger Bench of the Tribunal. The Larger Bench, after considering the generic principles regarding the identification of manufacturing processes under Section 2(f) of the Central Excise Act, 1944, and relevant precedents, concluded that cutting carpet rolls into smaller sizes and stitching linings at the edges does not amount to manufacture. The Larger Bench held that this process does not result in the emergence of a distinct independent commodity subject to duty under the provisions of the Act.

Based on the decision of the Larger Bench, the Tribunal set aside the impugned order and allowed the appeal filed by the appellant, providing consequential relief if any. This judgment clarifies the scope of what constitutes 'manufacture' under the Central Excise Act, emphasizing that certain processes, such as cutting and stitching in this case, may not meet the threshold for classification as manufacturing activities under the law.