Packing duty-paid ingredients into a box raised an arguable manufacture issue, while suppression was not prima facie established for limitation.

Packing two duty-paid ingredients together in a card box and presenting them as a new product raised a debatable question whether the process amounted to manufacture under the Central Excise Tariff. The materials disclosed a prima facie case for the assessee, so the issue was treated as arguable at the interim stage. On limitation, regular visits by excise officers and inspection of maintained records weakened the allegation of suppression, and no prima facie basis was found to defeat the claim on limitation. Interim relief was therefore granted because both manufacture and suppression involved triable issues requiring protection pending further proceedings.

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Issues: (i) Whether the process of packing duty-paid constituents together in a box amounted to manufacture; (ii) Whether there was prima facie suppression justifying denial of limitation.

Issue (i): Whether the process of packing duty-paid constituents together in a box amounted to manufacture.

Analysis: The question turned on whether re-packing two duty-paid ingredients into a card box and presenting them as a new product could be treated as manufacture. The objection based on Note 11 of Section VI of the Central Excise Tariff was treated as arguable, and the materials disclosed a debatable issue on the nature of the process.

Conclusion: The issue was held to be arguable and the assessee had a prima facie case.

Issue (ii): Whether there was prima facie suppression justifying denial of limitation.

Analysis: The assessee's premises were under regular visit by Central Excise officers and the relevant records were maintained and inspected. In that background, the conclusion that the department had been misled and that there was suppression was not accepted at the interim stage. A prima facie case on limitation was found in favour of the assessee.

Conclusion: Prima facie, there was no suppression so as to defeat the claim on limitation.

Final Conclusion: Interim relief was granted to the assessee on the basis that both manufacture and limitation raised triable issues warranting protection pending further proceedings.

Ratio Decidendi: Where the process alleged to constitute manufacture and the question of suppression on limitation are both debatable on the face of the record, interim relief may be granted on a prima facie assessment of the assessee's case.

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