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TMI Blog1991 (12) TMI 144X X X X Extracts X X X X X X X X Extracts X X X X ..... imposed upon them. In reply, the appellants submitted that they purchased polypropylene cloth from the market and no filter cloth bags as such were manufactured by them. They only cut and stitch the cloth purchased from the manufacturer of propylene cloth for meeting the requirement of filtration of juice during the course of manufacturing of sugar or sugarcane and these cannot by any stretch of imagination be called as filter bags in the accepted sense of the term. These so-called bags were never sold by them nor these are in fact marketable. In fact, these so-called bags can serve the purpose of filtering, juice only, when these are fitted in the Filtration equipment as replaceable parts. Without the Filtration equipments, the folded and stitched cloth cannot serve the purpose of filtration. In this context, it was the contention of the appellants that this type of operation i.e. to say stitching together folded filter cloth so as to be suitable for fitting as an important part of the Filtration equipment was not a process of manufacture as defined in Sec. 2(f) of the Central Excises and Salt Act, 1944. The filter cloth remains filter cloth after doubling and stitching and no ne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on or rayon yarns being arranged lengthwise and held together by cotton yarn placed horizontally at widely spaced intervals. (3) Union Carbide India Ltd. v. Union of India. 1986 (24) E.L.T. 169 (SC) wherein the Apex Court held that to become goods an article must be something which can ordinarily come to the market to be bought and sold. Aluminium cans or torch bodies produced by extrusion process neither sold nor marketable hence not excisable goods attracting levy of excise duty. (4) Geep Industrial Syndicate Ltd. v. Central Government and Others, 1987 (31) E.L.T. 865 (SC) wherein the Apex Court relying upon the earlier decision rendered in the case of Union Carbide India Ltd. v. Union of India, supra held that aluminium cans were merely intermediate goods in the manufacture of flash light and therefore production of aluminium cans out of Aluminium slugs does not amount to manufacture. (5) Collector of Central Excise, Aurangabad v. Shree Vidhya Paper Mills, 1988 (35) E.L.T. 361 wherein while explaining the meaning of the word manufacture appearing in Section 2(f) of the Act it was held by the Supreme Court that an article with a different name commercially may have emer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oration v. Ram Chander, 1987 (32) E.L.T. 231 (SC), wherein the Supreme Court held that stitching of clothes amounts to manufacture and it cannot be disputed that by stitching, commercially different goods are brought into existence and the case of Sri Gopal Stores v. Collector of Central Excise, 1988 (38) E.L.T. 634 (Tribunal) wherein it was held by the Tribunal that stitching of jute fabrics into jute bags constitutes manufacture under Section 2(f) of the Act. Since it brings into existence a new commercial product namely Jute bags . She also cited the case of Plasmac Machine Manufacturing Company Pvt. Ltd. v. Collector of Central Excise, 1991 (51) E.L.T. 161 wherein the Apex Court held that for articles to be goods these must be known in the market as such or these must be capable of being sold in the market as goods. Actual sale in the market is not necessary. 4. We have considered submissions and the case law cited at the Bar. From the admitted facts on record, it is clear that the appellants are manufacturing sugar from sugarcane by the Double Carbonation Double Sulphitation process. They are purchasing the polyproplene cloth from the market and from this purchased cloth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inery. In the instant case, according to the appellants these filter bags are neither made for repair nor made for machinery and therefore, the Additional Collector has rightly denied the benefit of such Notification. 6. We have considered submissions. It is not in dispute and cannot be disputed that the said Notification No. 281/86-C.E. applies to such goods which are intended for use for repair and maintenance of machinery. It is the case of the appellants that they are using filter bags for filtration of cane juice by fitting on the filtration machine during the course of manufacture of sugar. Under these circumstances, the benefit of the said Notification was rightly denied by the Additional Collector. The case of Gujarat State Fertilisers Company Ltd, supra is inapt in the facts and circumstances of the present case. 7. It was also contended by the learned Advocate that in the instant case Show Cause Notice was issued on 14-8-1989 for a period from 1-3-1986 to 15-5-1989 and therefore except for a short period which falls within six months, the demand for the remaining period was time-barred for, the extended period of five years was not available to the Department to raise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a misleading description and drew attention to para 10 of the judgment rendered by the Apex Court in the case of M/s. Jaishri Engineering Co. (P) Ltd. v. Collector of Central Excise, 1989 (40) E.L.T. 214. She also highlighted that under the Central Excises and Salt Act and the Rules made thereunder the appellants being the licensee were under the legal obligation to mention the making of the filter bags even though it may not amount to excisable goods in their opinion. But the appellants never informed the Department about the making of the filter bags. Under these circumstances, the Department was right in invoking the extended period of 5 years for raising the demand. 8. We have considered submissions. From the record it is clear that the appellant is a licensee under the Central Excises and Salt Act, 1944 and the Rules made thereunder. It is admitted fact on record that they never communicated the Department regarding the making of filter bags out of polyproplene cloth purchased by them from the market. Thus following the ratio of the judgment rendered by Jaishri Engineering Co. (P) Ltd. v. Collector of Central Excise, supra, we hold that the demand was not hit by limitation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... applicability of the MODVAT . One of the meanings given in the Chambers Twentieth Century Dictionary, Eighth Reprint 1982 of the term Equipped is apparatus required for any operation, e.g. making tea and Equipment means the act of equipping; things used in equipping or furnishing; outfit. In the instant case, it is the case of the appellants themselves (see paragraph 3.3 of the reply to the Show Cause Notice) that the Filter Bags are being manufactured in the factory by the appellants by stitching the Polyproplene cloth on sewing machine manually and this type of preparation, that is to say, stitching together folded F. Cloth so as to be suitable for fitting as an important part of the Filtration equipment is not a process of manufacture. In paragraph 3.2 of their reply to the Show Cause Notice the appellants have also admitted that the Filter Bags are used for filtering juice in the Filtration equipment in the process of manufacturing of the sugar. In the light of this discussion, we hold that the Filter Bags manufactured by the appellants are equipment and, therefore, are excluded under Explanation (i) of the said Notification, Consequently, they are not entitled for the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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