CESTAT rules in favor of M/s. Kuwer Industries Ltd. & Ors. in metallised polyester film duty case

The Appellate Tribunal CESTAT, New Delhi, ruled in favor of the appellants, M/s. Kuwer Industries Ltd. & Ors., in a case concerning the clearance of metallised polyester film without duty payment. The Tribunal held that the process of metallisation on polyester film does not amount to manufacturing, based on a Supreme Court precedent. As metallising duty paid film does not result in a new product, the Tribunal set aside the duty payment order and penalties imposed by the Commissioner, allowing all the appeals.

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Issues: The judgment involves the clearance of metallised polyester film without payment of duty.

In the case before the Appellate Tribunal CESTAT, New Delhi, the issue revolved around the clearance of metallised polyester film without payment of duty. The appellants, M/s. Kuwer Industries Ltd. & Ors., had been penalized by the Commissioner for clearing the film without duty payment, based on the premise that the process of metallisation did not amount to manufacture. The appellants argued citing a Supreme Court case (Metlex (I) Pvt. Ltd. v. C.C.E., New Delhi) that metallising duty paid film does not constitute manufacturing. The Supreme Court had ruled that laminating or metallising duty paid film does not result in a new product, and hence, does not amount to manufacture. As the process of metallisation on polyester film was deemed not to be manufacturing, the Appellate Tribunal set aside the order confirming duty payment and penalties, allowing all the appeals.

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