Tinting of paints for market readiness can prima facie amount to manufacture, while a new limitation plea was refused at stay stage.

Tinting of paints at a depot to obtain the required shade and render the product ready for marketing was treated as a process that could prima facie amount to manufacture under the inclusive Central Excise definition, justifying pre-deposit of duty and interest. The limitation objection was not entertained at the stay stage because it had not been raised in the reply to the show cause notice or before the lower authorities. On penalty, no sufficient case was made out for insisting on pre-deposit, so waiver was granted for that component.

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Issues: (i) Whether tinting of paints at the depot, undertaken to obtain the required shade and to make the product ready for marketing, prima facie amounted to manufacture so as to justify deposit of duty and interest. (ii) Whether the plea of limitation could be entertained at the stage of considering waiver of pre-deposit and whether penalty deserved waiver.

Issue (i): Whether tinting of paints at the depot, undertaken to obtain the required shade and to make the product ready for marketing, prima facie amounted to manufacture so as to justify deposit of duty and interest.

Analysis: The definition of manufacture under the Central Excise Act was treated as inclusive and wide in scope. The process admitted by the appellant's Branch Manager showed that tinting was done at the depot to obtain the shade required by customers and that the product was thereafter made ready for marketing. On that admission, the process was viewed as a treatment intended to render the goods marketable to the consumer. The reliance placed on Chapter Note 4 of Chapter 33 of the Central Excise Tariff Act, 1985 was distinguished, and the authorities were held to have a prima facie basis for treating the activity as manufacture.

Conclusion: The process was prima facie treated as manufacture, and the appellant was required to deposit the duty and interest.

Issue (ii): Whether the plea of limitation could be entertained at the stage of considering waiver of pre-deposit and whether penalty deserved waiver.

Analysis: The limitation plea had not been raised in the reply to the show cause notice or before the lower authorities, and it was held that such a point could not be entertained at the stay stage in the facts of the case. As regards penalty, no sufficient case was made out for insisting on its pre-deposit at that stage.

Conclusion: The limitation plea was not entertained at the stay stage, and pre-deposit of the penalty was waived.

Final Conclusion: The application succeeded only in part: relief was granted for the penalty component, while deposit of duty and interest was directed as a condition for the appeal to proceed.

Ratio Decidendi: A process undertaken to make goods marketable to the consumer can prima facie fall within manufacture under an inclusive statutory definition, and a new limitation plea not raised below cannot ordinarily be considered at the stage of waiver of pre-deposit.

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