1998 (11) TMI 224 - AT - Central Excise

Tribunal rules processes on aluminium channels for suitcase manufacturing not subject to excise duty

The tribunal ruled in favor of the appellant, holding that the processes carried out on aluminium channels for suitcase manufacturing do not amount to ... Manufacture Issues:Determination of whether processes carried out on aluminium channels for use in manufacturing suitcases amount to manufacture and attract Central Excise duty.Analysis:The appeal concerns the demand for duty on aluminium channels shaped for suitcase manufacturing under Tariff Item 7613.90 and 83.07. The appellant's counsel argues that the processes conducted on the channels are solely to adapt them for suitcase production, maintaining that these processes do not transform the channels into new goods subject to excise duty. Reference is made to various judgments indicating that activities like cutting, bending, and drilling do not constitute manufacturing, citing the Tribunal's decision in Collector of Central Excise v. Dodsal Pvt. Ltd., among others.The respondent contends that the channels, post-processing, result in distinct products, constituting manufacturing. Relying on the Kerala High Court's decision in Electrical & Hardware Industries v. Union of India and other cases, the respondent argues that actions such as cutting and welding can be classified as manufacturing, citing instances where new products emerged following these processes.In response, the appellant's counsel disputes the applicability of the cases cited by the respondent. Regarding the Kerala High Court's ruling, it is emphasized that no definitive decision on manufacturing was reached, as the court merely acknowledged observations without providing a conclusive judgment. Similarly, the appellant distinguishes the Simplex Castings Pvt. Ltd. case from the current scenario, highlighting the basic nature of the processes involved in shaping channels for suitcase manufacturing.Upon reviewing the case records and legal precedents, the tribunal concludes that the processes conducted on the channels do not result in the creation of new, distinct products. It is determined that the activities are akin to those where cutting and shaping do not amount to manufacturing. The tribunal clarifies that the Kerala High Court's judgment and the Simplex Castings Pvt. Ltd. case do not establish a precedent regarding the processes under consideration. Consequently, the appeal is upheld, granting relief to the appellants based on the finding that the processes do not lead to the manufacture of new goods.In conclusion, the tribunal rules in favor of the appellant, allowing the appeal and providing consequential relief.