TaxTMI 
TaxTMI 
2004 (11) TMI 107
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....93, inter alia, proposing levy of duty on the typewriter ribbons cleared by the assessee during the period 1-3-1988 to 30-9-1992 by invoking extended period of limitation under proviso to Section 11A of the Central Excises and Salt Act, 1944 (in short the 'Act'). In the reply to the show cause notice, assessee took the stand that no process of manufacturing is involved in the concerned transaction. Assessee receives excise duty paid on typewriter/telex ribbons in jumbo rolls of 210 mtrs. or more length from two small scale units in Madras. In the assessee's factory typewriter rolls are fed into cutting and spooling machines wherein the ribbons of standard length of 10 mtrs. and 5 mtrs. are cut and spooled into metal spoons. The ribbons in spools are packed and sold by the assessee. With reference to Heading 96.12 of the Schedule to the Central Excise Tariff Act, 1985 (in short the 'Tariff Act') it was submitted that since appropriate central excise duty had been levied on the rolls there is no question of paying any further duty. Apart from cutting of ribbons into standard pre-determined lengths, the assessee does not take any activity on the ribbons received. It is to be noted tha....
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....t by no stretch of imagination it amounts to manufacturing. Reference was made to Prince Khadi Woollen Handloom Prod. Coop. Indl. Society v. C.C.E. [1996 (88) E.L.T. 637 (S.C.)] and Union of India v. J.G. Glass Industries Ltd. [1998 (97) E.L.T. 5 (S.C.)] to buttress the plea. It was submitted that whenever the intention was to include a particular activity within the manufacturing activity it was specifically provided. Reference was made to Chapters 37, 48 and 85 of the Tariff Act, as position stands in 2002-2003. In any event, according to him, the extended period of limitation was not available to be applied because to infer suppression of facts something more than mere bona fide mistake was necessary to be established by the Revenue. As a matter of fact, various authorities have entertained doubt as to whether the activities in question involved manufacturing process. Particular reference was made to the New Delhi Bench judgment of CEGAT which is the subject matter of appeal in Civil Appeal Nos. 2682-2690/2000. 7.Burden is on the Revenue to prove manufacture. Strong reliance was placed on Aman Marble Industries Pvt. Ltd. v. Collector of C. Ex., Jaipur [2003 (157) E.L.T. 393 (S.....
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....itself a commercial commodity capable of being sold or supplied. The material from which the thing or product is manufactured may necessarily lose its identity or may become transformed into the basic or essential properties. [See Deputy Commissioner of Sales Tax (Law), Board of Revenue (Taxes), Ernakulqm v. M/s. Coco Fibres - (1992 Supp. (1) SCC 290)]. 11.Manufacture implies a change but every change is not manufacture, yet every change of an article is the result of treatment, labour and manipulation. Naturally, manufacture is the end result of one or more processes through which the original commodities are made to pass. The nature and extent of processing may vary from one class to another. There may be several stages of processing, a different kind of processing at each stage. With each process suffered the original commodity experiences a change. Whenever a commodity undergoes a change as a result of some operation performed on it or in regard to it, such operation would amount to processing of the commodity. But it is only when the change or a series of changes takes the commodity to the point where commercially it can no longer be regarded as the original commodity but ins....
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....ing distinctive name, use and character. The moment there is transformation into a new commodity commercially known as a distinct and separate commodity having its own character, use and name, whether be it the result of one process or several processes 'manufacture' takes place and liability to duty is attracted. Etymologically the word 'manufacture' properly construed would doubtless cover the transformation. It is the transformation of a matter into something else and that something else is a question of degree, whether that something else is a different commercial commodity having its distinct character, use and name and commercially known as such from that point of view is a question depending upon the facts and circumstances of the case, [(See Empire Industires Ltd. v. Union of India. - (1985 (3) SCC 314)]. 15.Keeping in view the aforesaid principles it has to be examined whether the Collector and CEGAT were justified in holding that manufacturing activities were made out. As appears from the order of the Collector, reference was made to the statements given by two officials of the assessee. Ribbon in rolls of 210 mtrs. and above in length are purchased from M/s. Solar Packa....
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....ving distinct name, character, and use are on terra-firma. No case is made out for interference with the factual findings. 17.Coming to the plea of limitation CEGAT noticed that there was manufacturing and removal under Rule 9(1) at the Madras unit and, therefore, demand of duty under Rule 9(2) read with Section 11A was applicable. It was concluded that there was clear contravention of Rule 9(1) with the intention to evade. Therefore, the contention that the assessee harboured bona fide and germine belief of the non-excisability of the product was not acceptable. No clarification from the department was sought for and accordingly extended period of limitation was applicable. 18.In M/s. Padmini Products v. Collector of Central Excise, Bangalore [1989 (4) SCC 275] it was observed with reference to earlier judgment in CCE v. Chemphar Drugs and Liniments, Hyderabad [1989 (2) SCC 127] that in order to avail limitation beyond a period of six months and up to a period of five years, in view of the proviso to sub-section (1) of Section 11A of the Act, it had to be established that the duty of excise had not been levied or paid or short-levied or short-paid, or erroneously refunded by rea....