2017 (8) TMI 1039 - AT - Central Excise

Manufacture - cutting and slitting of jumbo rolls of aluminium foil into smaller size - Held that - reliance in the case of SR Tissues Pvt. Ltd. 2005 (8) TMI 111 - SUPREME COURT OF INDIA wherein it was held that the process of slitting/cutting of jumbo roll of plain tissue paper/aluminium foil into smaller size will not amount to manufacture on first principles as well as under Section 2(f) of the said Act - appeal allowed - decided in favor of appellant.

Summary

Issues:
- Whether cutting, slitting, and printing of aluminium foils amount to manufacture and are subject to duty.
- Whether the activity of printing falls within the Small Scale Industry (SSI) exemption limit.
- Applicability of previous judicial decisions on similar activities.

Analysis:
1. The appellants, engaged in cutting, slitting, and printing of aluminium foils, were issued a notice demanding duty on these activities. Lower authorities confirmed the demands, leading the appellants to approach the Tribunal, which remanded the matter back to the original adjudicating authority citing specific judicial decisions for guidance.

2. Upon re-adjudication, the demands were again confirmed by the lower authorities, prompting the appellants to appeal before the Tribunal for a second time.

3. The appellant's counsel argued that cutting and slitting of aluminium foils had been addressed by the Supreme Court, which held that such activities do not amount to manufacture, citing the case of SR Tissues Pvt. Ltd. The counsel also referenced a Bombay High Court decision stating that certain activities on aluminium foil did not result in a distinct marketable commodity. Additionally, the counsel highlighted that the printing activity was minimal and fell within the exemption limit based on the value of clearances.

4. The Assistant Commissioner contended that a Supreme Court decision in the case of Kores India Ltd. established that cutting and spooling of certain materials amounted to manufacture. Referring to another Supreme Court decision involving steel plates, the Assistant Commissioner argued that demands confirmed on similar activities were upheld partially due to limitations.

5. The Tribunal considered the arguments presented by both sides.

6. The Tribunal observed that the Supreme Court decision in the SR Tissues Pvt. Ltd. case directly applied to the current scenario. If cutting and slitting of aluminium foil were not taxable, then the printing activity would also fall within the SSI exemption limit. The Tribunal distinguished the facts of the Kores India Ltd. case, noting the specific processes involved, which were not replicated in the present case. Similarly, the Tribunal differentiated the activities in the Sanjay Industrial Corporation case from the cutting and slitting activities under consideration.

7. Consequently, the Tribunal allowed the appeal in favor of the appellants, emphasizing the applicability of the SR Tissues Pvt. Ltd. decision and the exemption limit for the printing activity.

This comprehensive analysis of the judgment provides a detailed overview of the issues addressed and the Tribunal's decision based on the arguments presented by both parties and relevant judicial precedents.