2008 (8) TMI 147 - AT - Central Excise

Whether activity of packing of chemicals (acetic acid ethyl acetate) from tanker-lorry into barrels/carboys and labeling of names of chemicals on these containers before clearance amounts to manufacture held that tank mounted on lorry is not bulk pack therefore mere transferring of chemicals from tanker-lorry to small containers is not repacking - mere packing or re-labeling without repacking from bulk pack not amounts to manufacture

Summary

Issues:
1. Whether the activity of transferring chemicals from tanker-lorry to small containers amounts to "manufacture" under Section 2(f) of the Central Excise Act by virtue of Note 11 to Chapter 29 of the CETA Schedule.

Analysis:
1. The appeal questioned whether the activity of packing chemicals from a tanker-lorry into barrels and carboys constituted "manufacture" under the Central Excise Act. The Revenue argued that this activity fell under Chapter Note 11, making it subject to excise duty. However, the respondents contended that there was no repacking involved as per the Chapter Note. Citing relevant case law, the respondents argued their case.

2. The Tribunal, after considering the submissions and case law, found no sustainable ground in the Revenue's appeal. It was concluded that the transfer of chemicals from the tanker-lorry to small containers did not constitute repacking from a bulk pack. The labeling of chemicals on the containers further supported this finding. Referring to a Supreme Court judgment, it was established that mere packing or relabeling without repacking from a bulk pack did not amount to "manufacture."

3. As a result, the subject commodity was deemed not dutiable, rendering other issues raised in the appeal irrelevant. The Tribunal dismissed the Revenue's appeal based on the finding that the activity did not meet the criteria for "manufacture" under the relevant provisions of the Central Excise Act.

This detailed analysis of the judgment highlights the key arguments, case law references, and the ultimate decision reached by the Appellate Tribunal CESTAT CHENNAI regarding the issue of whether the activity of transferring chemicals constituted "manufacture" for the purpose of excise duty.