TaxTMI 
TaxTMI 
TaxTMI 
2011 (4) TMI 899
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....n of central excise for manufacture of blister rolls, poly foil pouches and polyester pouches classifiable under chapter heading No. 7607 and 3920 respectively of the schedule to the Central Excise Tariff Act, 1985. Pursuant to the visit to the premises of the appellants by the officers of the excise department, it was revealed that the process undertaken by the appellants involved merely slitting of jumbo aluminium foils into blister form rolls of the required sizes and thereafter printing them in multi colour as per the customer s requirement. The Apex Court in CCE vs. Printorium reported in 1996 (87) ELT 432 had held that printing on plain aluminium foils does not amount to manufacture. The Tribunal in M/s S.R. Tissues Pvt. Ltd. vs. CCE, New Delhi reported in 2001 (136) ELT 367 had held that slitting/cutting of jumbo rolls into rolls of smaller sizes does not amount to manufacture. In the case of CCE vs. Swaraj Mazda Ltd. reported in 2004 (174) ELT 447 and Shree Ram Packaging vs. CCE reported in 2003 (151) ELT 640 it was held that in the absence of manufacturing process no credit is admissible. Yet it was found that the appellants had availed cenvat credit and had utilized the s....
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....of taxation. Therefore, wherever the excise duty has been paid on the final product, the credit of duty paid on inputs cannot be denied. 8. It is the further contention on behalf of the appellants that Rule 16(2) permits credit of duty paid on inputs even if they are used in repair of goods and, therefore, it is unjustified and illegal to deny the credit on the ground that the process does not amount to manufacture. 9. Even assuming that the process is not a manufacturing one then there cannot be recovery of credit, rather there could be an order for reversal of ineligible credit. 10. It is further contention on behalf of the appellants that since the credit has already been utilized for payment of duty on final product, the provision regarding levy of interest is not attracted. 11. As far as penalty is concerned, it is the case of the appellants that they entertained the bonafide belief about excisability of their final product and hence validly availed and utilized the credit. Hence the appellant cannot be subjected to penalty. 12. Reliance is placed in the decisions in the matter of Ramsay India (Pvt.) Ltd., New Delhi vs. CCE, New Delhi re....
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....s by process of cutting, slitting and printing amounts to manufacture in terms of Section 2(f) of the Central Excise Act, 1944? 17. The term manufacture has been defined under Section 2(f) as under:- (f) manufacture includes any process, - (i) incidental or ancillary to the completion of a manufactured?(i) product; (ii) which is specified in relation to any goods in the Section?(ii) or Chapter notes of [the First Schedule] to the Central Excise Tariff Act, 1985 (5 of 1986) as amounting to [manufacture; or] (iii) which, in relation to the goods specified in the Third Schedule, involves packing or repacking of such goods in a unit container or labelling or re-labelling of containers including the declaration or alteration of retail sale price on it or adoption of any other treatment on the goods to render the product marketable to the consumer,] and the word manufacturer shall be construed accordingly and shall include not only a person who employs hired labour in the production or manufacture of excisable goods, but also any person who engages in their production or manufacture on his own account; 18. The process undertaken by the appe....
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.... bottles would not amount to manufacture within the meaning of Section 2(f) of the said Act. 23. In Paper Products case, the question was to whether there is an act of manufacture when a job worker prints a name on a film which is then utilized for the purposes of packaging and it was also answered in negative while reiterating the view expressed in J.G. Glass Industries case. 24. In Tarpaulin International case, the issue before the Apex Court was whether the tarpaulin made-ups which were prepared after cutting and stitching the tarpaulin fabric and fixing the eyelets involved process of manufacture and would fall within the definition of the said term, it was held that the process did not change the basic characteristic of the raw material and the end product. The process did not bring into existence new and distinct product with total transformation in original commodity. The original material used i.e. tarpaulin still remained and was called tarpaulin made-ups even after undergoing the process. Hence, it cannot be said that the process is a manufacturing process. The process of stitching and fixing eyelets would not amounting to manufacture process since tarpaulin afte....
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....icable to the facts of the present case for the reason that in the Kores case, jumbo rolls of 210 mtrs. or more length were subject to cutting and slitting to a standard length of 10 mtrs. and 5 mtrs. and then wound and spooled into metal spools and thereafter blister packed and sealed with aluminium foils, by which process a ready to use product, viz. typewriter ribbon or telex ribbon known to the market as typewriter/telex ribbon (ready to use product) having a different and distinct use came into being, and the jumbo rolls and the ready use product were not interchangeable, while in the present case, the jumbo rolls are not cut to any specific length but only slit lengthwise into specific widths. The judgments relied upon by the referral Bench are distinguishable from the facts of the present case inasmuch as, in the case of Indian Aluminium Cables Ltd. v. Union of India and Ors., 1985 (21) E.L.T. 3 (S.C.), the dispute related to classification of wire rods and not to manufacture thereof and the issue before the Apex Court in Laminated Packings (P) Ltd. v. CCE - 1990 (49) E.L.T. 326 (S.C.) was whether the lamination of duty paid kraft paper amounted to manufacture and th....
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....rpose as also in the blister form. In other words, the function of both the products in the case in hand is same. Equally is the case in respect of identity and character. Being so, the decision in Kores India case is clearly distinguishable. 28. In Metagraphs case, the question before the Apex Court was whether printed aluminium labels manufactured by the assessee were the products of the printing industry within the meaning of Notification No. 55/75-CE dated 01.03.75. Apparently, the issue was totally different and not relevant for the decision in the matter. Therein the labels were printed on flatbed offset printing press and the printing was done on a deep offset printing machine. The labels were meant to be fixed to refrigerators, radios, airconditioners, telephone sets etc. The Tribunal held that the printing on labels was only the incidental to its use and therefore, cannot be treated as product of printing industry. The Apex Court after considering the rival contention held as under:- 10. The label announces to the customer that the product is or is not of his choice and his purchase of the commodity would be decided by the printed matter on the label. The p....
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....and therefore the process of converting the writing and printing papers into teleprinter rolls and tapes was a process of manufacture under Section 2(f) of the said Act. As regards ammunition kraft paper it was held that the department had not adduced any evidence to show the nature of chemical treatment to kraft paper, the difference in characteristics and properties between the untreated kraft paper and the treated kraft paper in order to establish whether any process of manufacture in terms of Section 2(f) of the said Act was introduced or not. Obviously, the matter was decided on the facts of the case and no law as such laid down. 32. The decision in Dipen Textile & Headway Lithographic case cannot be said to lay down correct proposition of law in view of the decision of the Supreme Court in S.R. Tissues case. 33. The decision in Gautam Offset case was in the peculiar facts of the case. Therein considering that the process by which the duplex board was subjected to printing, varnishing, gumming, pasting of release papers, cutting to size and shape and for the punching to establish blister card meant for packing of pens was held to be manufacture process, as the ....
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....nufacturer or the provider of the output service becomes liable to pay interest alongwith the duty where CENVAT credit has been taken or utilized wrongly or has been erroneously refunded and that in the case of the aforesaid nature the provision of Section 11AB would apply for effecting such recovery. 17. We have very carefully read the impugned judgement and order of the High Court. The High Court proceeded by reading it down to mean that where CENVAT credit has been taken and utilized wrongly, interest should be payable from the date the CENVAT credit has been utilized wrongly for according to the High Court interest cannot be claimed simply for the reason that the CENVAT credit has been wrongly taken as such availment by itself does not create any liability of payment of excise duty. Therefore, High court on a conjoint reading of Section 11AB of the Act and Rules 3 & 4 of the Credit Rules proceeded to hold that interest cannot be claimed from the date of wrong availment of CENVAT credit and that the interest would be payable from the date CENVAT credit is wrongly utilized. In our considered opinion, the High Court misread and mis-interpreted the aforesaid Rule 14 and wro....
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.... v. State of U.P. and Others reported in (1999) 9 SCC 700:- 81 It is also well settled that first attempt should be made by the courts to uphold the charged provision and not to invalidate it merely because one of the possible interpretations leads to such a result, howsoever attractive it may be. Thus, where there are two possible interpretations, one invalidating the law and the other upholding the latter should be adopted. For this, the courts have been endeavouring sometimes to give restrictive or expansive meaning keeping in view the nature of legislation, may be beneficial, penal or fiscal etc. Cumulatively it is to subserve the object of the legislation. Old golden rule is of respecting the wisdom of legislature that they are aware of the law and would never have intended for an invalid legislation. This also keeps courts within their track and checks individual zeal of going way ward. Yet in spite of this, if the impugned legislation cannot be saved the courts shall not hesitate to strike it down. Similarly, for upholding any provision, if it could be saved by reading it down, it should be done, unless plain words are so clear to be in defiance of the Constitution. ....