2006 (1) TMI 391

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....Shah, Moti Ajwani & Jitu Motwani, Advocates, A.V. Desai, Vipul A. Shah and K.V. Sahasrabudhe, Consultants, for the Appellant. Shri Manoj Krishna, SDR, for the Respondent. [Order per : Jyoti Balasundaram, Vice-President]. -  The applications for waiver of pre-deposit of duty of Rs. 1,04,73,056/- (Rupees one crore four lakhs seventy-three thousand fifty-six only) and penalty of equal a....

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....ey were purchasing standardized formulated powder classified by the supplier under Heading 3204.29 of CETA, and mixing powder into paste, their activity would not amount to manufacture in the light of the Note 6 of Chapter 32 and in the light of the Tribunal's order in the case of CCE, Mumbai-II v. Indian Dyes & Chemicals [2005 (188) E.L.T. 529 (Tri.-Mumbai)] and judgment of the Bombay High Court ....

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....ufacture. We observed that this Chapter Note creates a legal fiction as to what amount to manufacture. By applying this legal fiction we find that even diluting of a unformulated dye will amount to manufacture if this diluting is done for making it ready for use. We also observe that decreasing of colour powder also amounts to manufacture in view of this legal fiction created by Chapter Note 6 of ....

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....n of formulated powder to formulated paste would amount to manufacture. 4. We have carefully considered the rival submissions, we find that the applicants' contention that they were purchasing standardized/formulated powder from their supplier M/s. Indokem for conversion into paste form standardized/formulated is prima facie tenable. Further, in separate proceedings for the subsequent peri....