1991 (3) TMI 287 - AT - Central Excise

Tribunal affirms duty liability on printed cartons post punching as 'manufacture'

The Tribunal held that the appellants' job work of printing and punching cartons amounted to 'manufacture' for excise duty purposes. The duty liability on ... Manufacture Issues:- Whether the appellants' job work of printing and punching cartons amounts to 'manufacture' for excise duty purposes.- Whether duty liability arises on cartons after punching and printing.- Whether the value of clearances of cartons should be considered for exemption under Notification No. 83/83-C.E.Analysis:1. The appellants were manufacturing printed boxes and cartons from duplex boards, availing exemption under Notification No. 83/83-C.E. The issue arose when the Assistant Collector demanded duty, alleging the appellants exceeded exemption limits and did not comply with excise formalities. The appellants argued that job work for another entity did not constitute 'manufacture' for duty purposes. The Assistant Collector disagreed, citing Tariff Entry 17(3) which specifically mentioned boxes, cartons, and packing containers as excisable items.2. The Collector of Central Excise (Appeals) upheld the duty demand, leading to an appeal. The appellants contended that since they did not own the goods they processed for another entity, duty should not apply. Citing legal precedents, the appellants argued that mere printing or punching did not amount to 'manufacture.' However, the Junior D.R. argued that the process of manufacture was complete after punching, creating duty liability.3. The Tribunal considered the arguments and legal precedents presented. It was noted that 'punching' in carton manufacture involves cutting and shaping paper/board into cartons. The Junior D.R.'s assertion that manufacture completes after punching was uncontested by the appellants. Consequently, the Tribunal held that the appellants' process constituted 'manufacture' under the Central Excises and Salt Act, attracting duty liability on the cartons produced in their factory.4. The Tribunal concluded that the value of clearances of these cartons should be included for assessing exemption eligibility under Notification No. 83/83-C.E. Given the specific mention of cartons in the Tariff Entry and the completion of the manufacturing process in the appellants' factory, duty was upheld. The appeal was dismissed, affirming the duty demand by the lower authorities.This detailed analysis highlights the key arguments, legal interpretations, and precedents considered by the Tribunal in determining the duty liability on cartons manufactured by the appellants and the applicability of the exemption notification.