Tribunal: Tinting activity equals manufacture under Central Excise Act. Penalties upheld, except for Regional Manager.

The Tribunal held that the tinting activity by the appellant constituted manufacture under the Central Excise Act. The demand for the extended period and the penalty imposed on the appellant were deemed sustainable. However, the penalty on the Regional Manager was set aside due to the lack of technical knowledge of Central Excise provisions expected from marketing personnel. The appeals of Berger Paints India Ltd. were dismissed.

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Issues:
1. Whether the activity of tinting and selling goods by the appellant constitutes manufacture under the Central Excise Act, 1944Rs.
2. Whether the demand raised for the extended period is sustainableRs.
3. Whether the penalty imposed on the appellant is justifiedRs.
4. Whether the penalty imposed on the Regional Manager is validRs.

Analysis:

Issue 1:
The appellant was involved in tinting base paints with colorants at their depot, which was then packed and sold to dealers. The question was whether this activity amounted to manufacture under Section 2(f)(iii) of the Central Excise Act, 1944. The Tribunal held that the activities of packing, repacking, labeling, or any other treatment to render the product marketable independently constituted manufacture. Even if the goods were not sold directly to consumers, each activity performed by the appellant individually amounted to manufacture. The Tribunal referred to a previous judgment involving the same issue and concluded that the appellant's activities fell under the definition of manufacture.

Issue 2:
Regarding the demand raised for the extended period, the appellant argued that there was no malafide intention and that the issue was interpretational in nature. However, the Tribunal found that the provision of Section 2(f)(iii) was clear, and the appellant chose to litigate the matter. Therefore, the demand for the entire period was deemed sustainable.

Issue 3:
The penalty imposed on the appellant was challenged on the grounds that it should not be imposed for an interpretational issue. The Tribunal disagreed, stating that the appellant had chosen to contest the matter despite the clarity of the law. Consequently, the penalty was upheld as justified.

Issue 4:
Regarding the penalty imposed on the Regional Manager, the Tribunal considered that marketing personnel like the Regional Manager may not be expected to have technical knowledge of Central Excise provisions. As a result, the penalty on the Regional Manager was set aside, considering the circumstances. The Tribunal dismissed the appeals of Berger Paints India Ltd. and allowed the appeal of the Regional Manager.

In conclusion, the Tribunal upheld that the tinting activity by the appellant constituted manufacture under the Central Excise Act. The demand for the extended period and the penalty imposed on the appellant were deemed sustainable, except for the penalty on the Regional Manager, which was set aside.

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