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TMI Blog2010 (8) TMI 340X X X X Extracts X X X X X X X X Extracts X X X X ..... it was held that the process of purification and filtration being incidental or ancillary to the manufacture of a marketable product, the Respondent was entitled to Modvat credit on the inputs involved in the said process – In that view of the matter, we do not find any merit in the above Appeal and by answering the question of law in negative i.e. in favour of the assessee the same is accordingly dismissed - 79 of 2004 - - - Dated:- 24-8-2010 - V.C. Daga and R.M. Savant, JJ. REPRESENTED BY : None, for the Appellant. Shri P.V. Patankar i/by P.P. Patankar, for the Respondent. [Judgment per : R.M. Savant, J.]. - The above Appeal is filed challenging the order dated 9th February 2004 passed by the Customs Excise Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 60/- and Rs. 41,953/- respectively against the clearances effected during July 1995 to August 1995, September 1995 to October 1995 and November 1995 to December 1995 and imposition of penalty under Rule 173Q of Central Excise Rules 1944. 4. The said show causes notices were replied by the Respondent. It is contended in the said reply that they are exporting Hydrochloric acid and Sulphuric acid on payment of Central Excise Duty under claim of rebate as provided under Rule 12 of the Central Excise Act, 1944 (hereinafter referred to as "the Act"). It was further contended that the process of purification and filtration undertaken to make the produce marketable in export market would fall under the definition of manufacture as process inciden ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... if the goods belong to same entry, manufacture does take place if new identifiable/marketable goods known in market emerge due to operation conducted and that the nature of technology used is not relevant and, hence came to conclusion that MODVAT credit cannot be denied to the Appellants (the Respondent herein). As mentioned herein above, it is the said order which is impugned in the present Appeal. 6. We have heard the learned counsel appearing for the Respondent Mr. P.V. Patankar. None was present on behalf of the Appellant, though served. 7. The learned counsel for the Respondent drew our attention to the definition of the word "Manufacture" as contained in clause 2(f) of the said Act which is reproduced as under :- "2(f)"Manufact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as ready-to-wear undergarments and, since the said process was admittedly being carried out with the aid of power, liability for payment of duty under Item 22D gets attracted. The said judgment of the High Court of Kerala in the case of Metro Readywear (supra) was quoted with approval by the Apex Court in the matter of Regional Director Employees State Insurance Corporation v. Ram Chander reported in 1987 (32) E.L.T. 231 (S.C.) wherein an identical issue had come up before the Apex Court. Para-6 of the Judgment of the Apex Court wherein the judgment of the High Court of Kerala in the case of Metro Readywear Company (supra) is quoted, is reproduced herein under :- "6. Our attention was also drawn to the decision of this Court in M/s. Hin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a process of manufacture with the aid of power. It was held that ironing of stitched brassieres is incidental or ancillary to their manufacture since the said process was intended to give a finishing touch in order to render them marketable. In our opinion the ratio or the reasoning of the said decision is applicable to the facts of this case." 9. Relying upon the said judgement in the case of Metro Readywear (supra), the learned counsel for the Respondent contended that since the process of purification and filtration being incidental or ancillary to the manufacture of a marketable product, the Respondent was entitled to Modvat credit on the inputs involved in the said process. 10. Having considered the judgment of CESTAT, in our view, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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