TaxTMI 
TaxTMI 
2000 (2) TMI 121
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....r v. Collector of Central Excise, Meerut, reported in 1994 (24) E.L.T. 202 is also to be considered. 3.The appellants are engaged in the manufacture of aluminium medium and were also purchasing aluminium paste in bulk drums of 25 Kgs. and are packing the aluminium paste into smaller tins of 4 Kgs. and put them with the aluminium medium of 20 liters packing in a common carton and clearing the same describing the product as aluminium paint. The appellants filed classification list and claimed the classification of aluminium paint as ready mixed paints, enamels, primers and varnishes based on synthetic ploymers (and claimed the classification) under Chaper Heading 3208.90 and the same has been approved by the proper officer. Thereafter, it was found that appellants had excluded the cost of aluminium paste in the assessable value on the pretext that the said item was only a bought out item and paid duty only on the aluminium medium. A show cause notice was issued to the appellants and the adjudicating authority held that process of repacking of bulk aluminium paste bought out into smaller packing would amount to a process incidental or ancillary to the manufacture of aluminium paint a....
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....ure means "any process, incidental or ancillary for the completion of the manufactured product". He submits that definition of manufacture covers an activity which results in bringing about a change in the name, character or use of the product and the mere activity of placing repacked aluminium paste with medium in common carton does not result in emergence of a new product. Therefore, the activity undertaken by the appellants does not amount to manufacture in terms of definition of manufacture. For this, he relies upon the decision of the Hon'ble Supreme Court in the case of Union of India and Others v. Delhi Cloth and General Mills Co. Ltd. and Others, reported in 1977 (1) E.L.T. (J 199) and submits that in this case Hon'ble Supreme Court held that manufacture is generally understood to mean bringing into existence a new substance. He submits that as the process undertaken by the appellants does not bring into existence a new substance, therefore, it does not amount to manufacture. He further submits that putting two products in common carton does not amount to manufacture as held by the Tribunal in the case of Collector of Central Excise v. Kalinga Paints and Chemicals Industrie....
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.... process incidental or ancillary to the completion of manufacture product was not considered. Therefore, the ratio of the decisions is not applicable to the facts of the present case. 9.Learned Departmental Representative submits that the appellants are purchasing duty paid aluminium paste in bulk container of 25 Kgs. and for packing into Unit container of requisite size and thereafter, placing the same with the container of aluminium medium in one carton and thereafter clearing the same as aluminium paint. Since the aluminium paste if, kept in mixed condition has no shelf life, for this reason, it is the trade practice to put aluminium paste and aluminium medium in separate containers to facilitate their use as aluminium paint by the customer. He submits that these processes undertaken by the appellants are incidental or ancillary to the completion of the final product that is aluminium paint. He, therefore, submits that the process undertaken by the appellants amounts to manufacture. 10.Heard both sides. 11.Undisputed facts of the case are that appellants were manufacturing aluminium medium and were purchasing aluminium paste in drums of 25 Kgs. and thereafter, repacking the a....
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.... been carried out outside the factory. Whereas in the present case, the appellants were manufacturing aluminium medium and they were receiving aluminium paste in their factory and packing the same into smaller tins and were putting the same along with aluminium medium in one carton in the factory and were clearing the same as aluminium paint. Therefore, the appellants cannot say that the facts of the present case are similar to the facts of the case of Kalinga Paints & Chemicals Industries. Therefore, the ratio of the decision is not applicable on the facts of the present case. 14.The appellants also relied upon the decision of the Hon'ble Supreme Court in the case of Union of India and Others v. Delhi Cloth and General Mills Co. Ltd. and Others, reported in 1977 (1) E.L.T. (J 199). In this case Hon'ble Supreme Court has examined the scope of word "manufacture" and held that "manufacture is generally understood to mean as bringing into existence a new substance". The issue in respect of definition of manufacture as under Section 2(f)(i) of the Central Excise Act, 1944 that any process incidental or ancillary to the completion of the manufacture product was not before the Hon'ble S....