2015 (2) TMI 875 - AT - Central Excise

Conversion of carpet mats not deemed manufacturing under Central Excise Act; Appeal allowed for appellant.

The Tribunal, after referring the matter to the Larger Bench, held that the conversion of 'Nylon Tufted Carpet Mats' into floor mats and car mats does not ... Manufacture within the meaning of Section 2(f) of the Central Excise Act, 1944 - identification of processes amounting to manufacture - emergence of a distinct independent commodity - cutting and stitching as industrial processes - consequential reliefManufacture within the meaning of Section 2(f) of the Central Excise Act, 1944 - cutting and stitching as industrial processes - emergence of a distinct independent commodity - Conversion of nylon tufted carpet mats in rolled form into floor mats/car mats by cutting into sizes and stitching edges amounts to manufacture under Section 2(f) of the Central Excise Act, 1944. - HELD THAT: - The Tribunal applied the Larger Bench's generic principles for identifying processes that constitute manufacture. The factual process involved cutting carpet rolls into smaller sizes and subjecting those cut pieces to edge-stitching with velvet lining by job workers. The Larger Bench held that such operations - cutting the rolls into sizes and stitching linings at the edges - do not amount to manufacture and do not result in the emergence of a distinct independent commodity exigible to duty under Section 2(f). Applying that authoritative decision, the Tribunal concluded that the described conversion does not attract excise duty as manufacture. [Paras 2, 3]The cutting and edge-stitching of rolled nylon tufted carpet mats into floor mats/car mats does not amount to manufacture; appeal allowed and impugned order set aside with consequential relief.Final Conclusion: The Tribunal, following the Larger Bench, held that cutting rolls into sizes and stitching linings at the edges does not constitute manufacture under Section 2(f) of the Central Excise Act, 1944; the impugned order is set aside and the appeal is allowed with consequential relief. Issues Involved:Conversion of 'Nylon Tufted Carpet Mats' into floor mats and car mats - Whether it amounts to manufacture.Analysis:The judgment by the Appellate Tribunal CESTAT Chennai focused on the issue of whether the conversion of 'Nylon Tufted Carpet Mats' in rolled forms into floor mats and car mats would amount to manufacture. The Tribunal examined the process involved, where the carpet mats purchased in roll forms are cut into different sizes and shapes. Subsequently, the edges of the mats are stitched with velvet lining through job workers, resulting in the emergence of floor mats or car mats.The Tribunal, in this appeal, referred the matter to the Larger Bench of the Tribunal. The Larger Bench, after considering the generic principles regarding the identification of manufacturing processes under Section 2(f) of the Central Excise Act, 1944, and relevant precedents, concluded that cutting carpet rolls into smaller sizes and stitching linings at the edges does not amount to manufacture. The Larger Bench held that this process does not result in the emergence of a distinct independent commodity subject to duty under the provisions of the Act.Based on the decision of the Larger Bench, the Tribunal set aside the impugned order and allowed the appeal filed by the appellant, providing consequential relief if any. This judgment clarifies the scope of what constitutes 'manufacture' under the Central Excise Act, emphasizing that certain processes, such as cutting and stitching in this case, may not meet the threshold for classification as manufacturing activities under the law.