TaxTMI 
TaxTMI 
TaxTMI 
2019 (10) TMI 577
X X X X Extracts X X X X
X X X X Extracts X X X X
....packs consisting of printing ink reservoir and printing ink cartridges and labelling the small packs so refilled. (c) Blending and mixing of chemicals for the manufacture of printing ink make up solution and packing and labelling. (d) Relabeling of imported printing make up solution without involving any process of refilling. The original packing is only relabelled. (e) Refilling from bulk to small packs of wash solution and labelling. (f) Relabeling of imported wash solution without involving any process of refilling. The original packing is only relabelled. 3. The appellant imported ink in bulk and procured the container form third parties in open market. The ink was procured and refilled in these containers and labelled and cleared as such. Various show cause notices were issued to the appellant by invoking the extended period of limitation on the grounds: (a) Refilling of ink/labelling of the containers from bulk drums/cans amounts to manufacture and liable for excise duty. (b) The cenvat credit sought to be denied of CVD on the imported printing ink make up cartridges and wash solution which relabelled and cleared on payment of duty holding that the activity of labellin....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ame control machine after which the containers are sold. We have also seen that printing ink bulk drums is classified under heading 3215. We also find that the appellant is importing ink filled above said containers and affixing the label on such containers. Those containers are also classified under heading 3215. The classification of such containers was never disputed at the time of import of the containers already filled reservoirs/cartridges or bottles. Even if when these containers are cleared by the appellant after affixing the label on the containers the same were classified under heading 3215. Only reason for holding that the activity amounts to manufacture by the Commissioner is that these containers are specific shapes and sizes of impugned items making them compatible with printers manufactured/traded by them. The impugned items are made as per fitment, which make them unique for their compatible printers only and hence the amounts to manufacture. But the Commissioner has dropped the demand pertaining to refilling of ink to Jerry Can and Bag-In- Box as these products does not have any specific shape and size and are not fitted inside the printers and are only connected w....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... or more processes, the raw material undergoes some change. To say this is to equate "processing to manufacture" and for this we can find no warrant in law. The word "manufacture" used as a verb is generally understood to mean as "bringing into existence a new substance" and does not mean merely "to produce some change in a substance," however minor in consequence the change may be. This distinction is well brought about in a passage thus quoted in Permanent Edition of Words and Phrases, Vol. 26, from an American judgment. The passage runs thus :- "Manufacture implies a change, but every change is not manufacture and yet every change of an article is the result of treatment, labour and manipulation. But something more is necessary and there must be transformation; a new and different article must emerge having a distinctive name, character or use." 21. We have seen that the appellant has procured the empty containers and does not manufacture such containers. The appellant is only and simply filled the empty containers with ink and no other activity undertaken as a result of process of refilling no new article comes into existence. Prior to undertaking such activity the pr....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ely, tissue paper, craft paper, thermal paper, writing paper, newsprints, filter paper etc. The tissue paper is the base paper which is not subjected to any treatment. The jumbo rolls of such tissue papers are bought by the assessee, which undergoes the process of unwinding, cutting/slitting and packing. It is important to note that the characteristics of the tissue paper are its texture, moisture absorption, feel etc. In other words, the characteristics of table napkins, facial tissues and toilet rolls in terms of texture, moisture absorption capacity, feel etc. are the same as the tissue paper in the jumbo rolls. The said jumbo rolls cannot be conveniently used for household or for sanitary purposes. Therefore, for the sake of convenience, the said jumbo rolls are required to be cut into various shapes and sizes so that it can be conveniently used as table napkins, facial tissues, toilet rolls etc. However, the end-use of the tissue paper in the jumbo rolls and the end-use of the toilet rolls, the table napkins and the facial tissues remains the same, namely, for household or sanitary use. The predominant test in such a case is whether the characteristics of the tissue paper in t....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... corresponding to these Chapter notes in Chapter 34 under which the Organic Surface Active Agents fall. Therefore, the process of repacking undertaken by the appellants is not a process of manufacture." 26. Further, we find in the case of Safex Fire Systems (supra), wherein the issue before this Tribunal was as under: 2. The appellant had paid duty on the small quantity of chemicals manufactured by it. It also procured quantities required of the chemicals for filling into the fire extinguisher when they were first sold or for refilling in the extinguishers already sold by it, the maintenance of which it undertook a contract, quantities which had been depleted due to natural causes or had become unsuitable. It undertook the same activity with carbon dioxide. The question for consideration in these appeals is whether such filling of the chemicals and the carbon dioxide into the extinguisher, either in the appellant's own hands or the premises of the customer, amounts to manufacture. In those set of facts, this Tribunal has obsessed as under: 4. It is not necessary for us to recount the judgment of the Supreme Court and other courts that manufacture necessarily requires the co....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nwards. We are concerned with the period prior to this and therefore do not consider it necessary to examine whether the activity of the appellant would be manufacture within the meaning of the amended provision. 27. Further in the case of Mahavir Spinning Mills Ltd. (supra) wherein the issue before this Tribunal was whether the duty paid on paraffin wax in lump from the market, and after melting, transfer it in the moulds to get the shape of washers for using in the binding machine for waxing the sewing thread and as such the activity amount to manufacture or not. In the said case, this Tribunal has observed as under:- 10.In the instant case not the character, but only shape of the wax is being changed by the respondents in order to use it more conveniently and properly in their winding machines for waxing the sewing thread. They procure duty paid wax in lump form from the market, and after melting, transfer it in the moulds to get the shape of washers. The basic character of the wax remains the same and only new shape is given by them in order to use the same in the winding machine for waxing the sewing thread. No knew or different article or commodity is thus manufactured by....
X X X X Extracts X X X X
X X X X Extracts X X X X
...." means goods specified in [[the First Schedule and the Second Schedule] to the Central Excise Tariff Act, 1985 (5 of 1986)] as being subject to a duty of excise and includes salt. 32. From the perusal of the above provisions, we find that the duty of excise levied on the excisable goods which are manufactured in India. Only if the activity amounts to manufacture will be the question of the rate at which the excise duty is to be levied is relevant. Merely because an item is classifiable under a sub heading it would not have a bearing on whether the activity amounts to manufacture or not. In the impugned order, the Commissioner has not analysed the activity of refilling/relabeling whether it amounts to manufacture or not. The Commissioner has proceeded to simply classify the impugned items and hold that as the items are classifiable under a particular sub heading the activity amounts to manufacture which is not in consonance with the levy provision. In the absence of any finding made by the Commissioner as regards how the activity of refilling/relabeling satisfies the test of manufacture no excise duty can be imposed. We also take note of the fact that there is no deeming provisio....