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TMI Blog2001 (9) TMI 214X X X X Extracts X X X X X X X X Extracts X X X X ..... ments including the Apex Court judgment and ld. Commissioner was not justified in distinguishing the Hon'ble Apex Court judgment as there has been no introduction of section/chapter notes in the tariff to consider the process of re-rubbersing of old and new spindles to be process of manufacture. The issue was the same as in the cited judgment. He points out that the findings recorded by the Commissioner was the view expressed by the Minority Member in the case of CCE, Bombay v. Industrial Corporation and Another [2000 (36) RLT 158 (CEGAT)]. However, the majority order applied the ratio of the Apex Court judgment in Lathia Industrial Supplies Co. Pvt. Ptd. v. CCE and the Bombay High Court judgment rendered in Industrial Linings Bombay (supra) and large number of judgments. The view now expressed by ld. Commissioner has already been rejected by the Tribunal in the light of majority order in CCE, Bombay v. Industrial Rollers Corporation (supra). He submits that this judgment again took up the issue in Lebracs Rubber Lining Pvt. Ltd. [2000 (122) E.L.T. 524 (T) = 2000 (39) 713 (CEGAT)] and again confirmed the issue by holding that there is no chapter note and section note to the effect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns SPASA have quoted many case laws and I proceed to examine them one by one as regards their applicability. The first case law quoted by them in this regard is in the case of Lathia Industrial Supplies Co (P) Ltd v. Collector Of Central Excise, Baroda [1987 (29) E.L.T. 751 (S.C.)]. In the quoted case, the Hon. Supreme Court held that the department did not dispute about the manufacturing activity done by the appellants before 14-3-1986 and so it cannot be argued that the activity of appellants amounted to manufacture after that date. The significance of the date 14-3-1986 is that the jurisdictional Superintendent of the appellant had intimated that with effect from 14-3-1986 re-rubberising and relining of old and used vessels such as tanks etc. would not amount to manufacture under Sec. 2(f) of the Central Excise Act, 1944. In such a situation the Apex Court held that when there was no change in law and the activity of the manufacturer also remained the same both before and after 14-3-1986 and when the activity had not been disputed by the Department to be a manufacturing activity, after 14-3-1986 it could not be called as manufacturing activity for the earlier period. I find th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case on hand and also the raw material and the resultant product are entirely different from one another. Therefore this case law also does not help the noticee in my view. The next case law quoted is Ugar Sugar Works Ltd. v. Collector of Central Excise [1990 (47) E.L.T. 561 (T)]. In this case relying on the decisions in the case of Saraswathi Industrial Syndicate Ltd., referred to above the Tribunal had held that re-grooving of sugar mill rollers and grooving of re-shelled mill rollers did not amount to manufacture as envisaged by Sec. 2(f) of the Central Excise Act, 1944. As discussed above, the case law on Saraswathi Industrial Syndicate Ltd., is not relevant here. Further, the decision is also based on the Supreme Court decision in the Lathia case and so does not apply for the reasons already discussed earlier. One more case law quoted is Collector of Central Excise, Patna v. Saran Engineering Co. Ltd., Bihar [1994 (17) E.L.T. 568 (T)]. In the quoted case the CEGAT have held that repairing and reconditioning is distinct from manufacture and re-shelling of roller shafts did not amount to manufacture as envisaged under Sec. 2(f) of the Central Excise Act, 1944. Thus the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Therefore I reject this also, I would like to add here that from the processes described in this order, it is evident that there is not much difference in between rubberisation of new spindles and rubberisation of worn out rollers. The process in both cases is the same. When the process carried our in respect of spindle has been held to be a manufacturing process, the process out in respect of the worn out products will also have to be treated as manufacturing activity only The above findings cannot be held to be in terms of Apex Court judgment. As the Apex Court in Lathia Industrial Supplies Co. Pvt. Ltd. (supra) has clearly ruled that activity of re-rubberising and relining of old and used rollers does not amount to manufacture. The short finding given by the Apex Court is extracted below :- [Order]. - We have heard learned Counsel for the parties at some length. 2. On 1-9-1986, the Superintendent of Central Excise, Range No. 1, Ahmedabad, intimated to the appellant as follows : (relevant portion extracted) "It is decided that with effect from 14-3-1986 …..... re-rubberising and relining of old and used vessels such as tanks etc. may be held as process not amounting to "m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Supplies Co. Pvt. Ltd. is an identical issue, wherein re-rubberising and relining of old and used rollers was held to be not a process of manufacture. In the present case, also the appellants carried out a process of anti-corrosive treatment of rubber lining on tanks. Tanks do not become a separate and a new commodity, known separately in trade. The tanks remain tanks. The process carried out by the appellants is a process, which does not bring into existence a new product, neither the process is an incidental or ancillary process for completion of a manufactured product. The department has also not shown and proved that the process carried out by the appellants is incidental or ancillary process for the completion of a manufacture product. What has been alleged in the show cause notice is that the process of applying anti-corrosive rubber lining amounts to a process of manufacture, inasmuch as a new product had emerged. The department has also not shown that the ingredient of Section 2(f)(ii) are satisfied, inasmuch as the product which has emerged is in relation to any goods mentioned in the Section or Chapter Note in the Schedule to Central Excise Tariff Act, 1985 as amounting t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able from the fact in the present case. Ld DR pointed out that the judgment of Tansi Engineering Works is no longer a good law, in view of Kerala High Court judgment rendered in the case of Electrical Hardware Industries v. Union of India as reported in [1997 (95) E.L.T. 27]. However, on the aspect pertaining to the interpretation of the definition of the terms "manufacture" under Section 2(f) of Central Excise Act rendered in Tansi Engineering Works has not been touched upon or overruled by the Kerala High Court. Hence, to this extent, the observations made by Tribunal in case of Tansi Engineering Works on the term "manufacture" is still applicable to the present case. In view of the reasoning given by us, we set aside the impugned order and allow the appeal. 7. In the case of Modi Xerox Ltd. v. CCE, Meerut - [1997 (91) E.L.T. 116], the Tribunal again held that stripping of the original damaged coating of photoreceptor drum which is used in the manufacture of photocopiers and application of the new coating does not amount to manufacture as noted in Paras 3 and 4 which is noted herein below :- 3. We have carefully considered the submissions made by both the sides. 4. The ju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... note that the findings given by the Commissioner was not accepted by the majority order in CCE, Bombay v. Industrial Rollers Corporation Another (supra). The findings recorded by the Third Member in Paras 28 to 35 is noted below :- 28. After hearing the matter the Hon'ble Member Judicial while agreeing with the findings of the Collector (Appeals) observed that the Revenue in these appeals has not explicitly brought out any ground or evidence to show that such process rubber lining would bring the change in the name, character or use of the article and it is a different article known and sold as such. The Revenue has also not said the word against the evidence placed by the assessee before the lower authorities. On the other hand, Hon'ble Vice President has taken a view that the facts are not clear and the question arises whether activity of the assessee's unit is that of merely an act of lining pipes, tanks, vessels, pipes or other equipments or that of manufacture of articles of rubber. 29. Arguing for the Revenue, Shri Sumit Das, learned JDR justified the view taken by the Hon'ble Vice President in remanding the matter and particularly he drew my attention to the Paras 15, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case of Shriram Rubber Lining v. CCE, Pune reported in [1998 (98) E.L.T. 418 (Tribunal)] wherein it was observed that "the judgment referred by the Hon'ble Supreme Court in the case of Lathia Industrial Supplier Pvt. Ltd., as an identical issue, wherein re-rubberising and re-lining of old as well as new tanks to increase their life does not amount to manufacture. In the present case also the appellants carried out the process of anti corrosive treatment of rubber lining on tanks. Tanks do not become a separate or a new commodity, known separately in trade. The tanks remain tanks. The process carried out by the appellants is a process, which does not bring into existence a new product, neither the process is an incidental or ancillary process for completion of a manufactured product. The department has also not shown and proved that the process carried out by the appellant is incidental or ancillary process for the completion of a manufactured product. What has been alleged in the show cause notice is that the process of applying anti corrosive rubber lining to a process of manufacture inasmuch as a new product has emerged." 32. He said that further Supreme Court while distinguis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hether the loss was speculative one. 33. I have carefully considered the submissions made by both the sides and perused the records particularly the respective orders with reference to the difference of opinion. I find that there is a lot of force in the arguments advanced on behalf of the respondents that Tribunal cannot go beyond the subject matter of the appeal. In both the respective orders it was held that mere rubber lining of tanks and vessels received from the manufacturers by the respondent do not amount to manufacture. No appeal has been filed by the department on the issue on which the matter has been directed to examine by the lower authorities as proposed by the Hon'ble Vice President nor that issue was the subject matter of dispute before the authorities below. The Assistant Collector has taken the view that rubber lining of tanks and vessels amounts to manufacture. On the other hand, the Collector (Appeals) has taken the view it does not amount to manufacture relying upon the various decisions. The contention of the party from the beginning is that rubber lining of tanks and vessels do not amount to manufacture. It was not even the case of the department that the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er of Income-tax v. Calcutta Discount Company Ltd., [1971 (82) ITR (94) (Cal.)] to which I was a party. After reviewing several authorities. Sankar Prasad Mitra J., as the learned Chief Justice then was, observed as follows at page 948 of the report :- "The above decisions of the different High Courts in India establish beyond doubt that the word 'thereon' in Section 33(4) is restricted to the subject matter of the appeal before the Tribunal and the subject matter of the appeal consists of the memorandum or grounds of appeal, the additional grounds, if any, allowed by the Tribunal, and the grounds, if any, urged by or on behalf of the respondent, to support the order under appeal. If the Tribunal, therefore, does not allow a particular grounds to be urged, that ground can never be included in or considered to be part of the subject matter of the appeal." 34. In the instant case the controversy before the Assistant Collector as well as the first appellate authority was whether rubber lining of tanks/vessels received from the manufacturers by the respondent amounts to manufacture and not whether they were manufacturing vessels/tanks and rubber articles. In the facts and circumsta ..... X X X X Extracts X X X X X X X X Extracts X X X X
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