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2023 (11) TMI 520 - AT - Central ExciseActivity amounting to manufacture or not - activity of packing of rechargeable batteries along with chargers and labelling the same is a process incidental or ancillary to the completion of a manufactured product - whether the activity undertaken by the Appellants would amount to 'manufacture' or not as defined under Section 2(f) of the CEA, 1944? - HELD THAT:- In the present case, it is observed that after undertaking the activity of packing the chargers with the batteries and labelling them no different commercial commodity comes into existence. The goods viz. the charger and batteries remain exactly the same even after they are put together in a blister pack - In light of the decision of the Hon'ble supreme Court in M/S. SERVO-MED INDUSTRIES PVT. LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, MUMBAI [2015 (5) TMI 292 - SUPREME COURT], it is held that the activity of mere packing of rechargeable batteries along with battery chargers and labelling the same as “Eveready Rechargeable/Ultima” and “Uniross/Power Bank” does not amounts to manufacture. Section 2(f)(ii) of the CEA, 1944 deems certain processes as amounting to manufacture, if there is a Section Note or a Chapter Note deeming the processes as amounting to manufacture. In the present case, neither under Section XVI nor under Chapter 85 there are any notes deeming activity of packing or repacking as amounting to manufacture. Further, in terms of Section 2(f)(iii) of the CEA, 1944 goods specified in 3rd schedule to the CEA, various processes like packing or repacking, labelling or relabelling is deemed to be the manufacturing process - the demand confirmed in the impugned order dated 02.12.2009 is not sustainable. Since the demand is not sustainable, the question of demanding interest and imposing penalty does not arise. The activity undertaken by the Appellant would not amount to manufacture as defined under Section 2(f) of Central Excise Act, 1944.The same discussion holds good for the Appellant also, since they are the job workers who have undertaken the activity of packing and labelling. Thus, the demand of central excise duty from the Appellant M/s New Engineering Company is not sustainable, as the activity undertaken by them does not amount to 'manufacture' as defined under Section 2(f) of CEA, 1944. Since, the demand itself is not sustainable, the question of demanding interest and imposing penalty on the Appellant does not arise. Appeal allowed.
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