Calendering vs. Manufacturing: Appeal Allowed on Grounds of Process Definition

The appeal focused on whether the process of calendering, conducted with power, constitutes a process of manufacture. The Tribunal referenced past judgments to conclude that calendering alone does not amount to a manufacturing process. The Commissioner's inclusion of decatizing in the proceedings, not mentioned in the Show Cause Notice, was deemed beyond the original scope. Consequently, the appeal was allowed based on the grounds that calendering, as stated in the Notice, does not qualify as a manufacturing process.

---

---

Issues:
1. Whether the process of calendering carried out by the appellants with the aid of power constitutes a process of manufacture.
2. Whether the Commissioner exceeded the scope of the Show Cause Notice by considering the process of decatizing in addition to calendering.

Issue 1:
The appeal concerns demands on the process of calendering carried out by the appellants with the aid of power. The appellants argue that the activity of calendering has been previously addressed by the Apex Court in the case of Mafatlal Fine Spinning and Manufacturing Co. Ltd. v. CCE, where it was determined not to be a process of manufacture. The Tribunal also relied on this precedent in the case of Japan Dyeing Works v. CCE, which was upheld by the Apex Court. The counsel further cites a ruling in the case of CCE v. Swastik Dyeing & Bleaching Factory. Despite these precedents, the authorities confirmed demands asserting that calendering constitutes a process of manufacture. However, upon reviewing the Show Cause Notice, it is evident that only calendering was mentioned, with no reference to decatizing. Based on the cited judgments, the Tribunal concludes that calendering alone does not amount to a process of manufacture. Consequently, the appeal is allowed on this ground.

Issue 2:
The learned SDR argued that the Commissioner noted the appellants were also engaged in the process of decatizing, supporting the claim of a manufacturing process. In response, the counsel highlighted that the Show Cause Notice specifically alleged calendering without mentioning decatizing. The Tribunal, after careful consideration of the Show Cause Notice, found that the Commissioner exceeded the scope of the Notice by introducing decatizing into the proceedings. As per the judgments referenced, the mere act of calendering, as stated in the Notice, does not constitute a process of manufacture. Therefore, the Tribunal held that the Commissioner's inclusion of decatizing went beyond the original allegations and allowed the appeal solely on this ground.

---

---