TaxTMI 
TaxTMI 
2014 (6) TMI 856
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....er cover of commercial challans , and then converted/manufactured the same into excisable goods known as 'Eveready Rechargeable/ Ultima ', affixed the brand name as per the requirement of EIIL, and later sent the said goods to the depot of EIIL against the bills and challans . It is the contention of the department that the processes of placing of rechargeable batteries with battery chargers of various specifications in the blister card, testing, pasting Hologram Stickers on the blister, affixing the brand name 'Eveready', on the unbranded chargers and then, the whole set is sealed using thermo-sealing machine by putting the goods in between two blisters (upper and lower), resulted into the finished product, that is, 'Eveready Rechargeable/ Ultima ', which is a new distinct commodity having different commercial name in the market parlance, hence, these processes are 'manufacture' within the definition of Section 2(f)(ii) of CEA,1944 read with Note 6 of Section XVI of the First Schedule to the CETA, 1985. Further, relying upon the General Rules of Interpretation of CETA ,1985 it was alleged that in view of Rule 3(b) read with Rule 2(b) of Rules of Int....
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....ensure that they were in a working condition, and there was no question of matching any set of batteries along with a particular charger, as contended by the Department during the course of hearing. He also submits that there is no requirement that the chargers are to be used only with Eveready brand rechargeable batteries, as it can be used with any 'AA' or 'AAA' batteries. He also submits that the allegation of the Revenue is that they had imported rechargeable batteries which were classifiable under Chapter Heading 8507 of CETA ,1985 . In absence of any Chapter Note in Chapter 85 or Section Note with a deeming clause, mere packing of different excisable goods, in one single package, would not fall under the scope of 'manufacture'. He also submits that these goods are not notified in the Third Schedule to CEA; hence Section 2(f )( iii) is also not applicable to the facts of the present case. Further, he has submitted that mere value-addition by packing, the rechargeable batteries with battery recharger would not be construed as resulted into manufacture, as defined under Section 2(f) of CEA. In this connection, he has referred to the decision of the Hon....
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....xing with brand name of M/s EIIL and naming of the product as 'Eveready Recharge' (for combo pack) together with other details. In support, he has referred to the decision of the Hon'ble Supreme Court in the case of Flex Engineering vs. CCE, 2012 (276) ELT 153 (SC), showing that if a product is not saleable, it will not be marketable and consequently, the process of manufacture would not be held to be complete and duty of excise would not be leviable on it. He also relied on the following judgments:- (i) Medley International vs. CC : 2011 (263) ELT 641 (SC); (ii) Bata India vs. CCE, New Delhi : 2010 (252) ELT 492 (SC); (iii) Moti Laminates vs. CCE : 1995 (76) ELT 241 (SC). 4.1. Applying the above case laws to the facts and circumstances of the present case, the ld. Special Counsel vehemently contended that the impugned rechargeable batteries in bulk, imported in loose condition from China, are not marketable as such, without being packed in blister cards with the brand name. He has also submitted that during the course of hearing, four samples of rechargeable batteries in blister pack manufactured by four different companies, one of which being EIIL, have been produc....
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....this case and the penalty imposed on the Applicant is also justifiable. 5. Heard both sides and perused the records. Prima facie, at this stage, the issue needs to be considered is: whether various processes/activities involved in placing the rechargeable battery and battery charger in blister pack by the Applicant would result into manufacture of an excisable goods within the meaning of Section 2(f) of CEA, 1944. It is not in dispute that the Applicant received the raw materials, namely, rechargeable battery, battery charger, blister packs etc. from EIIL and undertook the job (various processes including affixation of the brand name of EIIL on the rechargeable battery and battery charger) and placed the rechargeable battery and battery charger in the blister packs, and returned the same to EIIL for ultimate sale. In the Notice, it is alleged that the activities/processes carried out by the Applicant in placing the chargeable battery and battery charger in blister packs, would be considered as manufacture in terms of Section 2(f )( ii) of CEA read with Note-6 of Section XVI of the First Schedule to CETA. It reads as: "From the above, it appears that such conversion, of those ....
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....tion into a finished article or a part), into complete or finished article shall amount to 'manufacture'." 7. The Ld. Special Counsel has laid much emphasis on the marketability of the product. It is vehemently argued that since after placing the battery charger and the rechargeable batteries in the same pack, a new distinct commodity emerges having distinct name and use, namely, 'Eveready Rechargable / Ultima ', which is a marketable commodity; thus satisfies the definition of 'manufacture' and accordingly, chargeable to excise duty. In support of the contention that once the product is marketable, hence dutiable, he has placed reliance on the judgments of the Hon'ble Apex Court in the case of Medley International, Bata India Ltd. & Moti Laminates ( Supra). It is also the contention of the Department that in placing the rechargeable battery and battery charger in one packing, the Applicant also undertook testing of the battery as well as the recharger; the process of testing is a process incidental and ancillary to. The process of manufacture and accordingly, the activity of packing, testing and affixing brand name etc. would come under the scope of ....