TMI Blog2014 (6) TMI 1072X X X X Extracts X X X X X X X X Extracts X X X X ..... to such activities are attracted. It leaves no room for doubt in my mind that the petitioner is prevaricating his stand which suits him to wriggle out from the provisions, which affects adversely. Had it been a case that the authority have raised a doubt and disputes over the process of dealing the material purchased by the petitioner, the proposition of law tired to be canvassed before this Court does not admit any quarrel. But in the instant case, the petitioner voluntarily approached the authority and surrendered his registration as a dealer and opted the registration as a manufacturer meaning thereby the petitioner itself treated the process to be a process of manufacture and, therefore, the authority has proceeded on the basis of the stand taken by the petitioner and issued the show-cause notice treating the transactions entered into during the relevant period when the petitioner held the registration as a dealer as manufacturing activities. It is not in dispute that the so called final product sold by the petitioner in the market is well-known as such and there is no dispute as was raised in the noted report involved in the instant case. The ratio which could be culled ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be contended that the activities undertaken by the petitioner does not amount to manufacturing and, therefore, excise duty is not attracted. Before proceeding further, this Court feels that the definition of the manufacturer as assigned in Section 2(f) of the Central Excise Act, 1944 is required to be reproduced which reads thus:- 2(f). manufacture includes any process - i) incidental or ancillary to the completion of a manufactured product. ii) Which is specified in relation to any goods in the section or Chapter notes of (The First Schedule) to the Central excise Tariff act, 1985 (5 of 1986) as amounting to (manufacture; or) iii) Which in relation to the goods specified in the Third Schedule, involves packing or repacking of such goods in a unit container or labelling or relabelling of containers including the declaration or alteration of retail sale price on it or adoption of any other treatment on the goods to render the product marketable to the consumer; and the word manufacture shall be construed accordingly and shall include not only a person who employs hired labour in the production or manufacture of excisable goods, but also any person who ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y. Since the petitioner itself approached the authority and surrendered the registration as a dealer and got subsequent registration as manufacturer, the authority issued the show-cause notice seeking an explanation and reply why the activity undertaken by the petitioner during the relevant period when it held the registration as a dealer does not amount to manufacturing activities. In fact, the authorities have proceeded on the basis of the statement of the petitioner and the conduct by which the registration as a dealer was surrendered and subsequent registration as manufacturer was obtained. The learned Advocate appearing for the petitioner is very much vocal in contending that if the department has taken a stand that the process undertaken amounts to manufacture, the onus lies on him to prove which cannot be shifted to the assessee. In support of the aforesaid contention, reliance is placed on the judgment of the Supreme Court in case of Collector of Central Excise, Chandigarh v. Steel Strips Ltd. reported in 1995 (77) E.L.T 248 (S.C). In the said report the Apex Court held that if the excise authorities have treated a process to be a process of manufacture, the onus lies ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the process to be a process of manufacture and, therefore, the authority has proceeded on the basis of the stand taken by the petitioner and issued the show-cause notice treating the transactions entered into during the relevant period when the petitioner held the registration as a dealer as manufacturing activities. Much emphasis is made on the expression manufacturer which according to the petitioner can be said to be complete when the raw material undergoes some changes. According to the petitioner the excise duty is attracted on the manufacture of the goods and not on mere sale. Further reliance is placed on a Constitution Bench judgment of the Apex Court in the case of Union of India v. Delhi Cloth and General Mills Co. Ltd. reported in 1977 (1) E.L.T (J 199) (SC) to the proposition that manufacture means bringing into existence new substance known to the market and not mere on some changes in the substance. The question, which came before the Constitution Bench was whether the manufacture of refined oil from the raw oil attracts imposition of the excise duty. It is sought to be contended therein that for manufacturing of Banaspati , the raw material used, is t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d no question was ever raised as to the activities of the petitioner and, therefore, show-cause notice issued on the extended period is not legally sustainable. The power to initiate a proceeding upon issuance of a show-cause notice beyond the statutory period is bestowed on the authority, under Section 11A of the Central Excise Act, 1944. Sub-section 4 of Section 11A of the said Act provides the period of five years from the relevant date within which the service of notice shall be effected provided the duty of excise has not been levied or has been short-levied or short-paid or erroneously refunded, by the reason of fraud; or collusion; or any wilful mis-statement; or suppression of facts; or contravention of any of the provisions of this Act. The issuance of notice reveals that such extended period was invoked because of the suppression of the facts with an intent to evade the payment of duty. It is contended by the petitioner that the extended period is applicable only when there is a positive act than mere inaction or failure on the part of the manufacturer. In support of the above contention reliance is placed upon a judgment of the Apex Court in the case of Nestle I ..... X X X X Extracts X X X X X X X X Extracts X X X X
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