2019 (10) TMI 19

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....iced that the assessee were engaged in the fabrication of aluminium composite panels (ACP) falling under subheading 7610.90 of CETA, 1985. A show-cause notice dated 19.5.2006 was issued to the appellants seeking to demand central excise duty of Rs. 5,52,044/- and Rs. 10.708/- Cess. Joint Commissioner vide Order-in-Original dated 23.7.2007 has confirmed the demand along with interest and imposing equal penalty under Section 11AC of the Act. On an appeal filed by the appellants, Commissioner (A) vide Order dated 10.9.2009 upheld the Order of the lower authority, hence, this appeal. 2. Learned counsel for the appellant submits that they are not manufacturing any new product. They are only cutting the already manufactured aluminium composite....

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....the market that this activity of cutting and routing i.e., cutting the aluminium of ACP would bring into existence the new product as known in the market. The Apex Court in the case of UOI v. Delhi Cloth and General Mills Co. Ltd. as reported in 1977 (1) E.L.T. (J199) (SC) has clearly laid down that manufacture means bringing into existence a new substance known to the market and not merely producing some change in a substance. The same ratio was reiterated by the Apex Court in Hindustan Zinc Ltd. (supra). In the light of both these rulings and the ruling relied on by the Counsel rendered in the case of M/s. Hubli Electricity Supply Company Ltd. and KEB (supra), it is clear that mere process of cutting and routing (i.e. cutting the grooves)....

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....The High Court of Karnataka has decided the issue in favour of the Revenue vide 2011 (273) ELT 377 (Kar.), Hon'ble High Court in para 8 has observed as under: 8. In the instant case, since the process of cutting, grooving and routing of aluminium sheets to make composite panels amounts to manufacture as a new product emerges the product is dutiable. The Tribunal has not taken into consideration the actual process involved and the nature of the operation that have been carried out by the respondent-assessee in changing the nature of the product which it has been using to suit the particular requirement. That mere cutting sheets to size, drilling, grooving, welding, fastening etc. is not manufacture when the original identity of the ....

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....oses of assessment lies to the Supreme Court under Section 35L(b) of the Act and not to High Court under Section 35(G). 5. Heard both sides and perused the records of the case. We find that despite the various submissions given by the appellant, the issue stands decided by the jurisdictional High Court. As such, judicial discipline requires that this Bench follow the Hon'ble High Court's order, as the same has not been stayed or set aside by a higher Court. Therefore, we are not in a position to appreciate the submissions of the appellants as far as the merits of the case are concerned. We hold that the activity of the appellant in cutting, etc., of aluminium composite panels for the purpose of cladding amounts to manufacture. However, w....