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2017 (10) TMI 1181 - AT - Central ExciseArea based exemption - Backward area - N/N. 56/2002-CE dated 14.11.2002 - Revenue is of the view that the appellant is not entitled for the benefit of notification, on the grounds that the process of making refined lead ingots and lead alloys, does not amount to manufacture - denial of CENVAT credit - whether the activity undertaken by M/s. GM amounts to manufacture and M/s. GMI is not liable to pay duty? Held that: - expression manufacture under Section 2(f) was initially not correctly interpreted as per CBEC letter F.No. 4/3/2006 dated 16.06.2006 wherein it has been clarified that a number of departmental and private publications of Central Excise Act, 1944, published from time to time after 1986, contain(ed) an extra word andat the end of Section 2(f)(i) and before Section 2(f) (ii). The Section 2(f) reads as - manufacture includes any process, Incidental or ancillary to the completion of a manufactured product, which means that if the goods have been manufactured and any activity is done thereon for completion of the activity for further use, it shall amount to manufacture - A similar issue has been examined by this Tribunal in the Jindal Stainless Steelway Limited [2014 (9) TMI 658 - CESTAT MUMBAI] wherein the appellant was engaged in cutting and slitting of coils. In addition to that they have carried out the slitting into desirable width as per the customersrequirement, larger weight coils are cut into smaller weight as per the customers requirement, that the coils are coated and layered with plastic for improving drawability besides applying inter-leaving paper for protection of material so as to be fit for end use application. The said activity was examined by this Tribunal, as defined under Section 2(f) wherein the process incidental or ancillary, was held to amounts to manufacture. Admittedly, in this case, M/s. GM is engaged in the activity of removing impurities from unrefined lead ingots for making lead alloy and thereafter alloy ingots. The refined lead has been recognised in Chapter 78 of Central Excise Tariff Act, 1985 - it is clear that refined lead means the metal weight at least 99.9% of lead and with some other antimony, as prescribed in the Chapter heading note. Therefore, to classify under Chapter 78, first it should be refined to the extent of 99.9% of lead. The Chapter 78 of CETA, itself recognise a separate new product of 99.9% of refined lead. Whether there is a violation of Article 14 of the Constitution of India, or not? - Held that: - M/s. GM is located in the State of Jammu & Kashmir and working under Notification No. 56/2002-CE dated 14.11.2002 wherein the duty paid through PLA is entitled as credit to M/s. GM and to denial of credit to M/s. GM has resulted in discrimination when compared to other manufacturers of the same goods by same process. Moreover, in their own unit, located in Gandhidham (Gujarat) the benefit is extended. In the light of the above observation, we hold that there should be uniformity in the stand taken by the Revenue and there should be no discrimination in the case in hand and the other cases. In view of the fact that the Revenue itself has admitted that activity undertaken by the appellant amounts to manufacture, therefore, we hold that activity undertaken by M/s. GM cannot be discriminated. Whether the appellant has been treated as manufacturer or not, in terms of exemption notification under Customs N/N. 96/2009-Cus - Held that: - there is a process of manufacture when making refined lead from unrefined lead even as per the Customs authorities, read with the Import Export Policy, the FTP requires to bring into existence a new product having a distinct name, character and use, basis which the advance licences were granted to M/s. GM. Therefore, it is clear that even from this evidence, the process of making the refined lead and lead alloy ingots amounts to manufacture. Therefore, we hold that the process undertaken by M/s. GM amounts to manufacture in terms of exemption notification under Customs Notification No. 96/2009-Cus. Whether the ld. Adjudicating Authority is right to drop the demand on account of Cenvat credit utilised for payment of duty or not? - Held that: - a similar issue came up before the Hon'ble High Court of Bombay in the case of Ajinkya Enterprises [2012 (7) TMI 141 - BOMBAY HIGH COURT] wherein the Hon'ble High Court has held that in case of activity does not amount to manufacture, the payment of duty shall amount of reversal of Cenvat credit. Therefore, the ld. Commissioner has rightly allowed the claim of Cenvat credit to M/s. GM. Accordingly, the appeal filed by the Revenue is dismissed. Whether M/s. GMI is entitled for the benefit of exemption Notification No. 214/86-CE or not? - Held that: - in terms of Notification No. 214/86, the principal manufacturer has to file an undertaking before the jurisdictional Central Excise authority of job works that the principal manufacturer shall pay the duty on the manufactured goods. Admittedly, the said undertaking has been filed by M/s. GM before the authorities below. In that circumstance, there is no fault of the appellant and the benefit of Notification No. 214/86 cannot be denied. Appeal dismissed - decided against Revenue.
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