TaxTMI 
TaxTMI 
2025 (8) TMI 645
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....2013-14 (up to August-2014) on the clearances of excisable goods manufactured for the supplier of raw material on job work basis. The Original Adjudicating Authority, relying on the grounds taken in the show cause notice, confirmed the entire demand and also imposed the equal penalty under Section 11AC(1)(c) of Central Excise Act, 1944 read with Rule 25 of the Central Excise Rules, 2002. The Original Adjudicating Authority, after going through various submissions and perusal of the records, noted that the Respondent had done certain job work in respect of various customers like M/s. Angles Aluminium Corporation, M/s. HK Enterprises, M/s. Lismontagens Pvt Ltd and M/s. Lloyd Insulation (India) and examined the processes which were undertaken by the Respondent in relation to aluminium and the raw material supplied free of cost by above mentioned customers. However, while they have paid Central Excise duty on the job charges, the value of the raw material supplied free of cost by the supplier of the raw material, was not included in the assessable value for the purpose of payment of Central Excise duty. He also examined whether the process undertaken by the Respondent amount to manufac....
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....ot verify this crucial aspect as regard the thickness despite it having bearing on the applicability of the Chapter Note. He has also perused letter dated 29.09.2015 sent to the department intimating this facts much before the issuance of Show Cause Notice. Therefore, having regard to the challans submitted by the appellant, he inferred that the thickness of the aluminium coil was of more than 0.2 mm. 2. The Revenue appeal against the impugned order is mainly on the ground that the Commissioner (Appeals) has not appreciated the fact of the activities carried out by the respondent on the coils received, as the said activities have in fact resulted into new saleable and marketable product as per the aluminium coils which were laminated with polycraft / polysurlyne which resulted into a new product Aluminium Laminate (by which name it was marketed) and this new product is having totally different characteristics and use as described and that the case law relied upon by the Commissioner (Appeals) is not tenable. The department also felt that the Commissioner (Appeals) holding that the thickness of the aluminium coil is more than 0.2 mm is not correct in as much as delivery challan, ....
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....aph no. 08 and 09 which are as follows:- 8. before dealing with the rival contentions of the parties, we reproduce hereinbelow the relevant headings of the Chapter 76 of the Central Excise Act, 1985: Chapter 76 : ALUMINIUM & ARTICLES THEREOF Heading No. Sub-Heading Description of Goods (1) (2) (3) 76.06 Aluminium plates,sheets (including circles) and strip, of a thickness exceeding 0.2 mm 7606.20 Of aluminium alloys 76016 Other Articles of Aluminium 7616.10 Nails, tacks, staples, screws, bolts, nuts etc. 7616.90 Others 9. The basic question which needs to be answered in the present case is - whether M/s. Aldec Corporation, M/s. VPI and M/s. SREW were engaged in the manufacture of an Independent identifiable distinct product, in terms of manufacture and marketability. Chargeability is different from liability to pay duty. Chargeability arises on manufacture under Section 3 of the said 1944 Act. Liability to pay excise duty depends on classification. Therefore, there is a difference between the concept of "chargeability" and the concept of "classification". Levy is a....
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....e on manufacture, it failed on marketability for want of evidence. In the said case, this Court found that silver chloride was an independent identifiable product. However, the department had failed to lead evidence as to whether the silver chloride which was sold in the market having 75% silver content and the silver chloride which emerged as a by-product in filtering sulphate from mixture of zinc chloride had the same quantity of pure silver. It was found that the silver chloride which emerged by filtering sulphate from zinc chloride had only 50-53% silver whereas silver chloride sold in the market had 75% content of silver. Since the department had failed to prove marketability, this Court did not accept the contention of the department that a new product had emerged. Further, whether an article as envisaged by Section 2(f) has been manufactured or not solely depends on whether the article in question satisfies the test as laid down in the relevant chapter heading or sub-heading and is known as such in the commercial community. The coverage of the respective chapter headings has to be determined in the light of the section notes and chapter notes. Further, when an article is spe....
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....se Notice has mainly relied upon the fact that as per Chapter Note 3 of Chapter 76, the process of cutting, slitting, printing of aluminum foil shall amount to 'manufacture'. Therefore, the grounds taken in Show Cause Notice was that the processes carried out by the respondent in respect of 'coils' of suppliers shall amount to 'manufacture'. Essentially, the charges as framed at para 14.1 - 14.2 of the Show Cause Notice would show that the job work undertaken by the respondent resulted in manufacture of Aluminium Laminate / Polysurlyn coated Aluminum Foil falling under 7607 2096 and since there is a Chapter Note 3 to Chapter 76 applicable to the products of 187607, the process shall amount to manufacture. 4.3 We find that the Commissioner (Appeals) has taken into consideration letter dated 07.08.2015 sent to Investigating Range Officer, Silvassa, and certain challans furnished by the appellant and based on the perusal of the same, categorically held that the thickness of the raw material 'sheet' supplied by the respondent was more than 0.2 mm. The department has not been able to produce any cogent evidence to support that these invoices, challans etc. were fake or bogus. In fact....
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....ot fall under CETH 7607. We do not agree with the submission made by the learned Authorised Representative for the department because Hon'ble Supreme Court has held in Dunlop India vs. UOI reported in 1983 (13) ELT 156 (SC) that in view of the absence of chargeability and levy under Section 3, for erroneous use of CETH 7607 in their invoices and erroneously paying duty only on job charges, such errors cannot be a ground for promissory estoppel. 4.6 In the impugned order, the Commissioner (Appeals) has gone beyond the Show Cause Notice, since, in the impugned order, Commissioner (Appeals) has also examined the alternative plea that the processes being undertaken does not amounted to manufacture. We also examined the same keeping in view the grounds taken by the Revenue as also by the Respondent. 4.7 The Respondents mainly cited judgment of Commissioner of Central Excise vs. M/s. Aldec Corporation and Shreeji Laminators cited (supra). The Hon'ble Supreme Court in the case of Aldec Corporation has examined 'whether in the facts of the case the activities undertaken in respect of raw material amounted to manufacture or otherwise. 4.8 Hon'ble Supreme Court has held in the M/s. ....