Appellant's Spare Parts Repacking Deemed Manufacture Under Central Excise Act

The Tribunal upheld the decision that repacking and relabeling spare parts by the appellant constituted manufacture under the Central Excise Act. The goods fell under specific entries of the Central Excise Tariff Act, making them liable for duty. The appellant's failure to declare this activity as manufacture led to a longer demand period and penalty under section 11AC. The Tribunal dismissed the appeal, holding the appellant liable for duty payment and upholding the penalty.

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Issues:
1. Whether the activity of repacking/relabeling spare parts amounts to manufacture under Central Excise Act, 1944.
2. Whether the goods procured by the appellant are covered under the third schedule of the Central Excise Tariff Act, 1985.
3. Whether the demand is time-barred due to suppression of facts by the appellant.

Analysis:
1. The appellant, engaged in manufacturing three-wheeled motor vehicles and having a Spare Parts Division (SPD), repacks and relabels spare parts procured from vendors. The department argues that this activity amounts to manufacture under Section 2(f)(iii) of the Central Excise Act, 1944, as specified in the third schedule. The Revenue contends that excise duty based on MRP is required. The Commissioner (Appeals) upheld this view. The appellant argues that the goods are spare parts covered under a specific entry in the third schedule effective from 1-6-2006. They rely on judgments to support their position and claim no suppression of facts. The Revenue maintains the findings of the impugned order.

2. The goods procured by the appellant fall under specific chapters of the Central Excise Tariff Act. The appellant only repacks and relabels the goods without changing their classification. The goods remain classified under their original chapters after repacking. As per Section 2(f)(iii), repacking/relabeling for marketability is considered manufacture if the goods are specified in the third schedule. The goods in question fall under specific entries of the third schedule, indicating they are liable for duty as deemed manufactured goods. The insertion of a specific entry effective from 1-6-2006 does not change the liability of goods already covered under the third schedule before this date. The judgments cited by the appellant are distinguished based on the issues of classification and disputes, which do not apply to the present case. The appellant's failure to declare their activity as manufacture and the removal of goods without duty payment constitute suppression of facts, justifying the longer demand period and penalty under section 11AC.

3. The Tribunal upholds the impugned order, dismissing the appeal on 28.6.2018. The appellant is held liable to pay duty for repacking and relabeling spare parts, as the goods were covered under the third schedule before 1-6-2006. The appellant's argument regarding time-barring due to no suppression of facts is rejected, as their failure to declare the activity as manufacture constitutes suppression. The penalty imposed under section 11AC is upheld.

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