9911796707
TMI Blog1999 (9) TMI 874X X X X Extracts X X X X X X X X Extracts X X X X ..... is, whether the operation of putting duty-paid inked ribbons into spools/cassettes/cartridges, carried out by M/s. Magna Ink Limited amounted to manufacture. 2. After careful consideration of the case records and the arguments advanced from both sides, we have already allowed the appeals filed by the assessee - appellants as per the order pronounced on 26-7-1999 holding that the aforesaid process did not involve any 'manufacture'. Our detailed common order disposing of the nine appeals follows : - The Commissioner of Central Excise issued show cause notice dated 6-12-1993 to M/s. Magna Ink Limited and M/s Kores (India) Limited proposing recovery of central excise duty on computer printer ribbons in cassettes/cartridges classified under Chapter Heading No. 96.12 of the Schedule to the Central Excise Tariff Act, 1985 and proposing confiscation of certain stocks of the said goods as well as imposition of penalty under various provisions of the Central Excise Act and the Central Excise Rules. This show-cause notice pertained to the period 9-8-1990 to 31-10-1993. The Commissioner in this notice alleged that the process of putting inked ribbons spools/cassettes/cartridges resulted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the show cause notice dated 6-12-1993, placed reliance on the written submission of M/s. Magna Ink Limited and pleaded that they did not contravene Rule 209A of the Central Excise Rules as alleged in the show cause notice. 4. The show cause notices were adjudicated upon by the Commissioner of Central Excise as per his order dated 25-1-1996. The Commissioner, drawing support from certain decisions of the Supreme Court, held that the process of putting duty-paid typewriter or similar ribbons in cassettes/car-tridges amounted to manufacture. For reaching this finding, he also relied on Tribunal's decision in the case of M/s. Dipen Textiles (P) Limited v. Collector of Central Excise [1992 (62) E.L.T. 430 (Tribunal)]. However, on the question of limitation raised by the assessee - appellants, the adjudicating authority sustained their plea, in relation to the show cause notice dated 6-12-1993, that the extended period of limitation under the proviso to Section 11A(1) of the Central Excises & Salt Act was not invocable against them in the light of the correspondence between them and the Department. Consequently, the demand of duty for the period upto 6-6-1993 (being beyond 6 mont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ges ipso facto did not involve any "manufacture" within the meaning of this term under Section 2(f) of the Central Excises & Salt Act, 1944, so as to attract Central Excise duty. This, the learned Advocate argued, was the effect of the expression "whether or not on spools or in cartridges" occurring in Chapter Heading 96.12. In support of this submission, the learned Advocate relied on the minority view in the decision of a three Member Bench of the Tribunal in the case of M/s. Prabhat Associates and Others v. Collector of Central Excise, Bangalore [1985 (22) E.L.T. 465 (Tribunal)]. The question in that case was whether recording of magnetic cassette tapes or spool magnetic tapes amounted to "manufacture" of goods falling under Item No. 59; of the Central Excise Tariff. The said Tariff Item 59 was as follows :- "59. ARTICLES OF A KIND USED FOR SOUND OR SOUND AND IMAGE RECORDING, WHETHER RECORDED OR NOT NAMELY : - (1) …………….. (2) …………….. (3) …………….. (4) …………….."(Emphasis supplied) A learned Member of the Three Member ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion of the Madras High Court in the case of M/s. Computer Graphics Pvt. Ltd. v. Union of India [1991 (52) E.L.T. 491 (Mad.)], wherein the question was whether the cutting of jumbo rolls of graphic art films into shorter lengths called flats was 'manufacture'. The High Court answered the question in the negative, holding that the said process did not result in a new distinct and different commodity. The learned Advocate further pointed out that this decision of the Madras High Court was followed by the Tribunal in the case of Choksi Brothers v. Collector of Central Excise, Bombay-I [Appeal No. E/3950/90-C] as per Final Order No. 103/93-C, dated 29-3-1993. The learned Counsel cited yet another decision of the Tribunal in support of his contentions. In this decision, rendered in the case of Collector of Central Excise v. Shemaroo Video Recording P. Ltd. [1999 (108) E.L.T. 457 (T)], the question was whether the process of assembly of video cassettes out of duty-paid bought out video magnetic tapes and plastic casings amounted to 'manufacture' within the meaning of Section 2(f) of the Central Excise Act. The Tribunal, following its own decision in the case of British Physical Laborator ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... test laid down by the Apex Court for deciding whether a process was manufacture, in the case of Union of India v. J.G. Glass Industries Limited [1998 (97) E.L.T. 5 (S.C.)]. According to this test, a process would amount to manufacture - firstly, when a different commercial commodity comes into existence or the identity of the original commodity ceases to exist - and secondly, when the commodity which was already in existence will serve no purpose but for the said process. The learned SDR submitted that inked ribbon was of no commercial use but for the process of inserting it in spools/cartridges/ cassettes and consequently the commodity involved in the present appeals would not pass the two-fold test laid down by the Apex Court. 11. The learned SDR also placed reliance on the decision of the Tribunal in the case of Electronics Mechanical Industries v. Collector of Central Excise, New Delhi [1995 (76) E.L.T. 309 (T)] wherein the question whether slitting of jumbo rolls of audio tapes into tapes of narrower width not exceeding 6.5 mm amounted to manufacture was answered in the affirmative for the reason that a new marketable product came into existence. In this connection, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tting inked ribbons in spools/cassettes/cartridge amounted to manufacture. The process undertaken by M/s. Magna Ink Limited was nothing but putting duty-paid inked ribbons, meant for use in typewriters and similar machines, in spools/cartridges/cassettes. We have examined samples of the products produced before us by the counsel for the assessee appellants. The products are known in the market as 'typewriter ribbon', 'computer ribbon' etc. depending on the type of machine in which they are used. The ribbon has not undergone any change in physical or chemical Characteristics during the above process. The end use of the products is no different from that of the inked ribbon used. Therefore, in our considered view, the process undertaken by M/s. Magna Ink Limited would not pass the two-fold test laid down by the Apex Court in the Revenue-cited case of J.G. Glass Industries Limited and hence would not amount to 'manufacture'. The findings of the learned Commissioner (Appeals) on these vital aspects cannot be sustained. 14. In fact, the process of putting inked ribbon in spools/cartridges/cassettes is analogous to the process of assembly of video cassettes out of video magnetic ta ..... X X X X Extracts X X X X X X X X Extracts X X X X
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