Revenue's Appeal Dismissed; Cross Objections Rejected. Extended Period Not Applicable.

The Revenue's appeal was dismissed as unsustainable, and the cross objections were also disposed of. The Tribunal found no basis for invoking the extended period due to lack of evidence supporting willful misstatement or suppression of facts, rendering the demand beyond the normal limitation period and time-barred.

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Issues:
1. Whether re-packing of goods amounts to manufacture under Section 2 (f) (iii) of Central Excise Act, 1944.
2. Entitlement to benefit under Notification No.64/95-CE without following prescribed procedure.
3. Invoking the extended period for demand.

Analysis:

Issue 1:
The definition of "manufacture" under Section 2 (f) (iii) of the Central Excise Act includes packing or re-packing of goods. In this case, re-packing with necessary details for identification at the consignee's end falls under this definition. The re-packing was essential for selling the goods to the Defence Department, making it a manufacturing activity. The respondent's argument of being unaware of this being classified as manufacture was dismissed, citing a Supreme Court judgment mandating adherence to prescribed procedures for availing exemptions.

Issue 2:
The respondent claimed entitlement to Notification No.64/95-CE despite not following the prescribed procedure under Central Excise Rules. The Supreme Court precedent emphasized the mandatory nature of following procedures for exemption benefits, leading to the denial of the claimed exemption. Consequently, duty was deemed payable on the goods supplied.

Issue 3:
The extended period was invoked based on allegations of willful evasion of excise duty through misrepresentation and suppression of facts. However, the Tribunal found insufficient grounds to support these allegations. Precedents highlighted the necessity of positive actions or deliberate withholding of information for invoking the extended period. As no evidence of willful misstatement or suppression was found, the extended period was deemed inapplicable, and the demand was considered time-barred.

In conclusion, the Revenue's appeal was dismissed as unsustainable, and the cross objections were also disposed of. The Tribunal found no basis for invoking the extended period due to lack of evidence supporting willful misstatement or suppression of facts, rendering the demand beyond the normal limitation period and time-barred.

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