9911796707
TMI Blog2014 (9) TMI 658X X X X Extracts X X X X X X X X Extracts X X X X ..... c for improving drawability of, besides applying inter-leaving paper for protection of the material so as to be fit for end use application. The appellant took registration as a manufacturer in 2006, thereafter they procured capital goods and inputs for the manufacturing activity. On these capital goods, inputs and input service, the appellant availed Cenvat credit and thereafter cleared their finished goods on payment of duty. 3.1 The factory of the appellant was visited by the preventive department on 16.07.2008 and after scrutiny of records and recording the statement of various person, it was observed that the activity undertaken by the appellant does not amount to manufacture. Therefore, a show-cause notice dated 14.10.2010 was issued to the applicant by invoking the extended period of limitation for the period October 2006 to July 2010 and show-cause notice dated 06.09.2011 for the period August 2010 to March 2011. Another show-cause notice was issued for the period August 2012 to March 2013. The show-cause notices dated 14.10.2010 and 06.09.2011 were adjudicated by a common order. It was held that the activity of the appellant does not amount to manufacture. Therefore, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in Ajinkya Enterprises 2012-TIOL-578-HC-MUM-CX of the Bombay High Court. Therefore, impugned orders are required to be set aside. 6. He further drew out attention to the definition of Section 2(f) of the Central Excise Act, 1944 which defines the word "manufacture" and in support of their activity and for the definition of "manufacture", he relied on the decision of Hon'ble Apex Court in S.D. Fine Chemicals P. Ltd. 1995 (77) ELT 49 (SC) = 7. On the other hand, ld. AR strongly opposed the contention of the counsel and submits that as per the CBEC circular no. 811/8/2005-CX dated 02.03.2005 wherein the CBEC has clarified that the activity of cutting and slitting does not amount to manufacture. The same has been issued by the CBEC in the light of the Apex Court dismissing Revenue's appeal against Delhi High Court decision dated 21.11.2003 which quashed earlier circular no. 584/21/2001-CX dated 07.09.2001 wherein it was clarified that the process amounts to manufacture. 8. He further submits that the Adjudicating Authority has given his own finding on the issue whether the activity amounts to manufacture or not. Therefore, the decision of the Gurgaon Commissioner is no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... their production or manufacture on his own account;" 13. In the CBEC letter F. No. 4/3/2006-CX.I dated 19.06.2006, it has been clarified that a number of department and private publications of Central Excise Act, 1944 published from time to time after 1986 contain/contained an extra word 'and' at the end of the Section 2(f)(i) and before 2(f)(ii). It is clarified that as per the official Gazette there is no word 'and' between Section 2(f) (i) and 2(f)(ii). Now if we examine the Section 2(f)(i) which reads that "manufacture" includes any process, incidental or ancillary to the completion of a manufactured product, which means that if a goods has been manufactured and any activity is done thereon for completion of the activity for further use, it shall amount to manufacture. 14. In this case the appellant are not merely doing cutting and slitting of coils but they are putting PVC coating and also applying inter-leaving paper for protection of the said sheets. Therefore, in this case appellant are doing an activity ancillary to completion of the manufactured product. The said issue came up before the Hon'ble Apex Court in S.D. Fine Chemicals P. Ltd. (supra) wher ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nbsp; "Excise duty is on the manufacture of goods and not on the sale. Mr. Pathak is therefore right in his contention that the fact that the substance produced by them at an intermediate stage is not put in the market would not make any difference. If from the raw material has been brought into existence a new substance by the application of processes one or more of which are with the aid of power and that substance is the same as "refined oil" as known to the market an excise duty may be leviable under Item 23 (the present item 12)". 13.The decisions aforesaid make it clear that the definition of the expression 'manufacture' under Section 2(f) of the Act is not confined to the natural meaning of the expression 'manufacture' but is an expansive definition. Certain processes, which may not have otherwise amounted to manufacture, are also brought within the purview of and placed within the ambit of the said definition by the Parliament. Not only processes which are incidental and ancillary to the completion of manufactured product but also those processes as are specified in relation to any goods in the section or chap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... slitting of coil but various process, which are ancillary to completion of manufacturing process, are undertaken which is "precision in nature" in completion of the end product as a distinct product. Various processes as explained supra carried out is not for the purpose to cut the big coils, into small one for trade purpose; that the intent here is to customize specifically against OEM's requirements pertaining to specific end usage, without this specific customization, the OEM cannot go ahead in the manufacturing of various products." We concur the view of the ld. Commissioner of Central Excise, Delhi III, Gurgaon. 17. The ld. Commissioner also discussed the decision of Faridabad Iron & Steel Traders Association (supra) of the Hon'ble High Court of Delhi. In the case of Faridabad Iron & Steel Traders Association , the issue before the Hon'ble High Court was whether cutting and slitting from regular strips to smaller strips amounts to manufacture or not. In the case in hand, the activity undertaken by the appellant is more than that. Moreover, the clarification as per CBEC letter 19.06.2006, was not placed before the Hon'ble High Court. Therefore the said decisi ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
