1996 (6) TMI 146 - AT - Central Excise

Tribunal deems re-glass lining as manufacturing, upholds decision on duty refund claim

The Tribunal upheld the decision rejecting a refund claim for duty paid on re-glass lining of old equipment, deeming re-glass lining as manufacturing due ... Manufacture Issues:Refund claim rejection for duty paid on re-glass lining of old equipment, whether re-glass lining amounts to manufacture, applicability of previous judgments on similar cases, time-barred refund claim.Analysis:The appeal stemmed from the Collector of Central Excise (Appeals), Bombay's decision upholding the rejection of a refund claim for Rs. 86,841.26 duty paid on re-glass lining of old and used glass-lined equipment by the appellants, who manufacture glass-lined vessels. The vessels were initially cleared on payment of duty under TI 68 of the Schedule to the Central Excise Tariff. The process involved setting powder glass frit on the vessels, firing them, and using them in industries like chemicals, pharmaceuticals, and fertilizers. The dispute arose when the vessels were returned to the factory for stripping the old lining and applying fresh glass lining.The lower authorities deemed glass-lining as essential for the equipment's utility, equating re-glass lining to manufacturing and partially rejecting the refund claim as time-barred. During the hearing, the appellants referenced a Supreme Court decision regarding re-rubbering and re-lining old vessels, arguing that the same principle should apply to their case. However, the Tribunal noted that the Supreme Court's decision focused on the cut-off date for determining manufacturing processes, not on whether re-rubbering and re-lining constituted manufacturing.In this case, it was undisputed that glass lining transformed the vessel's name, character, and use, indicating a manufacturing process. The re-glass lining procedure mirrored the initial lining process, involving setting powder glass frit and firing the vessels. Consequently, the Tribunal concluded that re-glass lining amounted to manufacturing, dismissing the appeal on both substantive and time limitation grounds, as the appellants did not contest the time bar issue.Therefore, the Tribunal upheld the lower authorities' decision, rejecting the refund claim due to the manufacturing nature of re-glass lining and the absence of merit in the appellants' arguments.