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2024 (1) TMI 134 - AT - Central ExciseProcess amounting to manufacture or not - repacking of the spares from the bulk to small packets and labelling - demand of Excise Duty alongwith interest and penalties - invocation of Extended Period of Limitation. The whole case of the department is founded on the allegation that the concrete mixers and concrete pumps cannot be sold as such and that these have to be fitted on chassis which makes these products SPVs and therefore the spares sold by appellant are nothing but spares of SPVs. HELD THAT:- There is no commonality, except for the logo. The label on each packet mentions different numbers of the spares. On perusal of Invoice no.85157799 dated 31.12.2023 issued to M/s. Axon Constructions (P) Ltd, there are 4 items of spares supplied. These are valve cartridge press relief valve 2 nos., O Ring 14 x 2 5 nos., Ring D14 x 2.5 x 2.3 5 numbers, spring cover 2 nos. These are packed and consigned to the customer. The order is not placed unit wise or ‘packet wise’. The learned counsel for appellant has stressed on the word ‘unit container’ used in Section 2 f (iii). It is argued by the counsel that ‘unit container’ means container with predetermined quantity. The polythene bags used by appellant to repack are not designed to carry predetermined quantity. After goods are sold, it is packed in polythene bags and a label is fixed for identification. In the case of Lakme Lever Limited Vs CCE, Mumbai [2000 (10) TMI 96 - CEGAT, MUMBAI] it was held that if the product is marketable any amount of treatment to enhance its marketability would not amount to manufacture as per the definition - The Tribunal in the case of Lupin Laboratories Ltd. Vs. CC, and CE, Aurangabad [2001 (10) TMI 136 - CEGAT, MUMBAI] has taken similar view wherein the Tribunal held that since each product was marketable on its own, putting them all together did not confer them any attribute of marketability that the goods did not possess earlier. Thus, given by the facts of this case, the activity undertaken by the appellant of repacking from bulk into small packets in polythene bags and putting labels does not amount to manufacture as under Section 2 f (iii) of Central Excise Act, 1944 - the department has failed to establish the allegations raised in the Show Cause Notice that the appellant has to discharge excise duty on the spares sold by the appellant. The issue on merits is answered in favour of appellant and against the department. Time Limitation - HELD THAT:- The entire issue is interpretational in nature. Further the appellant has filed ER – 1 returns clearly stating the description of goods manufactured by them. There is no positive act of suppression established against the appellant indicating intent to evade payment of excise duty - thus, there are no grounds for invocation of extended period - the issue on limitation is answered in favour of the appellant. The demand of duty interest and penalties imposed cannot sustain - the impugned orders are set aside - appeal allowed.
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