TaxTMI 
TaxTMI 
2024 (10) TMI 1539
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...., 1944 and therefore, although excise duty was being paid on clearance of such goods, the Appellant would not be paying excise duty henceforth on such clearance of such goods. Along with the letter dated 26.12.2013, the Appellant also submitted a detailed list of 136 items where it was claimed by the Appellant that the process undertaken by them did not amount to manufacture. The appellant claimed that following activities were undertaken by them on the bought out items which did not amount to manufacture:- (i) Laser Marking - The finished goods ('FG') are bought from outside factory. No components of the FG are manufactured inside the factory. The FGs as bought are completely functional and marketable. The FG is unpacked inside the factory plant. Thereafter, the 'KOHLER' mark is engraved on the FG through laser printing. Tie FG is then re-packed and removed from the factory. (ii) Packing - The finished goods ('FG') consists of various components in unassembled form. The components are bought from outside the factory in bulk quantities. No components o/ the FG are manufactured inside the factory. No machine process is undertaken over the bo....
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....LVE TRIM and similar items 4. BOTTLE TRAP and similar items 5. FLOOR DRAIN and similar items 6. LOURE DOUBLE ROBE HOOK and similar items 3. The details of processes/activities undertaken by the appellants on purchased goods were examined and it was alleged that these processes amounted to manufacture in terms of Section 2(f) of the Central Excise Act and are detailed as under: (I) For goods "EOLIA SHOWR ONLY TRIM" The finished goods are having the components viz. 1. Face plate, 2. Cover kit, 3. Handle, 4. Bush, 5. Plastic rings of different size 6. Screw 7. Joint plate (i.e. made Of foam stick) etc. Each of these items is purchased from different foreign/indigenous suppliers in bulk quantities. whereas, for manufacturing of above finished goods, Face plate and Handle are used as such. But for making of "Cover Kit' Several activities are being undertaken before the final goods become finally ready for sale. These activities includes viz. (1) plastic rings of different size are fixed on 'cover kit' (2) thereafter 'joint plate' is made from "Foam Stick" and the same affixed on the back side of the 'Cover Kit. (3) Brand name "K....
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.... plant each item is taken as required for manufacturing of the desired functional Goods/product. Laser marking is done for brand name. Thereafter, quality/function test etc. is done to check the prescribed norms as set by assessee for their finished goods and if the same found "OK" in all respect, then goods is taken for packing activity, Thereafter, all the items/parts of goods kept separately in specific cover. Then all these components are packed in a single Packet along with Installation manual. Again on packet 'sticker' having some specification of the goods viz. date of manufacturing, M.R.P. Quantity, batch/code No. etc. is affixed. On this basis it was alleged that after doing these certain activities by assessee in their factory premises, a new/distinct product emerges as INLINE STOP VALVE TRIM which is functional, marketable and usable by their end users. (IV) Whereas, for the subject finished goods "BOTTLE TRAP", all the items to manufacture the subject are purchased by assessee from different suppliers in bulk quantities. After unpacking these items, each part/component of the goods is de-assembled/separated. All the individual items are then subjected to "PVD p....
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....5 was issued to the appellants for the period Jan 2015 to Oct 2015 for an amount of Rs. 3,50,53,785/- On the same grounds. The appellant contested their liabilities before the adjudicating authority on the ground that no excise duty was chargeable as the processes undertaken by the appellant did not amount to manufacture in terms of Section 2(f) of the Central Excise Act, 1944 and no new product emerges which could be held liable to excise duty and the impugned goods are not specified under Schedule 3 to the Central Excise Act. How the Learned Commissioner, confirmed the demands in whole and the disputed amounts of Rs. 1,61,46,303/- & Rs. 3,50,53,785/- already deposited by the appellant have been appropriated vide the impugned order against which the appellant is before us in the present proceedings. 4. The Ld. Counsel Shri Anand Nainawati appearing on behalf of the appellant argued that the processes undertaken by the Appellant do not satisfy the definition of manufacture under Section 2(f)(i) of the Central Excise Act, 1944 as not every process resulting in a change in the product can be assumed to be incidental or ancillary to the completion of a manufactured product. The tes....
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....ufacture. Reliance is placed on the judgments in Maruti Suzuki India Ltd. v. CCE - 2015 (318) ELT 353 and Gujarat Steel Tubes Ltd. v. State of Kerala - 1989 (42) ELT 513 (S.C.). The PVD coating enhances the visual appeal of the goods but does not result in a completely new product. For instance, a PVD-coated faucet remains a faucet. The finding that PVD coating constitutes manufacture because it makes products rust-free is contrary to the Supreme Court's judgment in Maruti Suzuki India Ltd., which held that a similar process (EDC coating) does not amount to manufacture. Similarly, the Supreme Court in Gujarat Steel Tubes Ltd. held that galvanization does not alter the structure or function of steel tubes and does not amount to manufacture. The process of simple kitting or sub-assembly cannot be considered "manufacture." Reliance is placed on Dalmia Industries v. CCE-1999 (112) ELT 305 (Tri.), affirmed by the Supreme Court in 2005 (184) ELT A37 (S.C.). Section 2(f)(ii) of the Central Excise Act 1944 is not applicable as there is no evidence that any activities are deemed to be manufacture under any Chapter Note or Section Note. The Ld. Commissioner has not held that any of the goods....
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....th the help of specific amount of gases and as a result of these process the colour of parts get changed to yellow alike the process of gold plating, Brand name i.e. "KOHLER" is then embossed/laser marked on these items" dos not amount to manufacture as PVD coating constitutes merely makes products rust-free and this process does not change any function of the product except colour does not bring into existence a new product. He has cited various case laws in support. We are of the considered opinion that the case laws cited by the appellants in their favour are not relevant to the facts of the case. The appellant has mis-applied the case law in the matter of 1998 (97) E.L.T. 5 (S.C.) UNION OF INDIA Versus J.G. GLASS INDUSTRIES LTD. The Hon'ble Supreme Court has laid two-fold test to determine whether the process amounts to manufacture. The Hon'ble Apex Court observed that "16. On an analysis of the aforesaid rulings, a two-fold test emerges for deciding whether the process is that of "manufacture". First, whether by the said process a different commercial commodity comes into existence or whether the identity of the original commodity ceases to exist; secondly, whether th....