TMI Blog1999 (5) TMI 155X X X X Extracts X X X X X X X X Extracts X X X X ..... Div. S.No. 87/93 as the same was previously approved provisionally under Rule 9B of Central Excise Rules, 1944. The issue before the authorities in these appeals was as to whether putting together different articles of feeding bottles in a single pack amounted to the process of manufacture, as per the definition of the term manufacture given in Section 2(f) of Central Excises Salt Act, 1944 and as to whether they are entitled for benefit of the said Notification? It was contended by the assessee before the authorities that they were only doing packing activities of the product and their process did not amount to manufacture. It was stated by them that they are buying bottles from W , feeder nipples from X , bottles lids from Y and little plastic part is from X manufacturers and then they assembled all these parts in their unit by putting all of them in a combine pack and sell the product in the brand name of Milk Care Designer Feeder , a prime product of the appellants. The Assistant Collector held that individually these articles can be called feeding bottle as claimed by them. It is only when a calibrated bottle is put alongwith nipple and flow regulator that the feedin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ottle in packing after sterilization by ultra violet rays before packing in master pack does not bring into existence a new product. It is his contention that for an activity to amount to manufacture, there should be an integration to result in the emergence of a single whole and further, in most of these cases, should involve some kind of fabrication to amount to manufacture; this vital test is not fulfilled. It was contended that the appellants do not undertake any assembly. Individual items have to be unpacked and assembled by the customer before use of the feeding bottle. They merely sterilised it and packed the same and such packing would not bring into existence a new product. He again relied on the said Bombay High Court judgment rendered in the Bombay Sales Tax Act and drew attention to the definition of the term manufacture under the said Act and stated that there is no difference between the definition and the said term in both the legislation and therefore there was no reason for the authorities to have rejected the said ratio of the judgment without giving any reasons. He further stated that the Larger Bench judgment in the case of Shriram Rayons v. Collector of Centr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the product. There is no change in the name, character and use of the product. In this context, he relied on the judgment rendered in the case of Heattreaters Engineers v. Collector of Customs, as reported in 1990 (47) E.L.T. 281, wherein it has been held that the process of heat treatment will not be a manufacturing activity. 7. With regard to Appeal No. E/190/92-C, the learned Counsel submitted that the classification adopted is incorrect in view of the fact that the department had classified the feeder bottles under Heading 39.24 which indicates that feeder bottles in question are products made from goods falling under Heading 39.01 to 39.14. He stated that if the feeder bottles are not made from products of 39.01 to 39.14 they cannot be treated as articles of plastic for the purpose of Heading 39.24. Since, according to the department, feeding bottles fall under Heading 39.24, there can be no dispute that the feeder bottles are indeed made from the goods falling under Headings 39.01 to 39.14. It is his submission that the various plastic parts like bottle, cap, etc. themselves are not goods of Headings 39.01 to 39.14. These are of plastic articles. These are in turn ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itled to the benefit of Notification No. 14/92-C.E. In this regard, he relied on the Board Circular dated 26-12-1996, the Tribunal s judgment rendered in the case of Bradma of India Ltd. v. Collector of Central Excise, as reported in 1990 (50) E.L.T. 533 and that of Vapson Products v. Union of India, as reported in 1987 (27) E.L.T. 608. 10. We have heard both the sides in the matter. The main question that is required to be answered in these appeals is as to whether the activity of packing various parts of Milk Care Designer Feeder after sterilization would amount to manufacture in terms of Section 2(f) of the Act and as to whether they are goods? The next question is that about it classification and entitlement of exemption under the relevant Notification referred to. The main case of the appellants is that their activity does not result into a process of manufacture, inasmuch as that there is no assembly in the strict terms but merely packing of the goods and the process of sterilization is not a process of manufacture incidentally or ancillary to the completion of a manufactured product. As noted in their contentions, they have stated that they are repacking various new part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the goods purchased to be sold under a different label or trade name even if that label or trade name is known as separate commercial commodity different from that by which the goods purchased are known in the market. The Court held that what is essential is that a commercially different commodity should come into being as a result of one of the activities described in clause (17) of the said Section 2 namely, producing, making, extracting, altering, ornamenting, finishing or otherwise processing, treating, or adapting any goods. It held that it is not possible in the present case to describe the activity of the respondents by any of the activity set out in clause (17) of the said Section 2. As can be seen the ingredients in Clause (17) of the said Section is more exhaustive then the defintion appearing in the Section 2(f) of the Act. Therefore, Bombay High Court s judgment in an identical matter pertaining to auto feeders involving such purchase of glass bottles, rubber nipples and plastic caps and selling them as auto feeders after putting them in one carton does not amount to manufacture is squarely applicable to the present case. 12. The Tribunal in the case of Heattreat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the two products packed together namely the paint and the catalyst do not bring into existence a new commodity although it might be sold by the appellant packed in a single container and under the nomenclature Eomite Airdrying Paint. It held that a product comes into existence only when they are mixed together immediately before their use. This is done only by the consumer and not by the appellant, as it is sold and removed from the factory. Hence no separate duty liability arises in packing the products as had been done by the appellant. In this regard, the Tribunal relied on the judgment rendered in the case of Collector of Central Excise v. Kalinga Paints Chemicals Industries. 17. As can be noticed in the case of M/s. Paramount Furnace Co. Pvt. Ltd. v. Collector of Central Excise by Final Order No. E/971/97-B1, dated 30-6-1997, the Tribunal held that the process of drilling, grinding etc. on cast wheels is not a process of manufacture to attract duty under T.I. 68. 18. In the case of Collector of Central Excise v. Lakaki Works Pvt. Ltd. as reported in 1988 (37) E.L.T. 392, it has been held that repacking, relabelling and renaming of a product does not amount to manufact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of a new goods. This judgment is also distinguishable. 23. Likewise, in the case of T.T.G. Industries Ltd. v. Collector of Central Excise (supra), assembly of parts namely, Hydraulic Mudgun and Drilling Machine brought into existence new goods, as there was a process of assembly and such process resulted in the emergence of a new product. 24. In view of the citations referred to in favour of the appellants and more particularly, the judgment of the Bombay High Court referred to, it has to be held that there has been no emergence of new goods namely, Milk Care Designer Feeder on the appellants packing, repacking the various articles received by them from various manufacturers and further a process of sterilization is not a process of manufacture. 25. The next question is of its classification and grant of benefit of the Notification. As we have held that the activity does not result into manufacture and no goods emerges, therefore, question of its classification and grant of the benefit of the Notification does not arise and no finding is called for. In that view of the matter, the appellants succeeded and the appeals are allowed. 26. [Order per : S.K. Bhatnagar, Vice Pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n others, it does not. Therefore, each case has to be examined on its own merits. 36. Again, many finished products are transported and sold in SKD or CKD condition but that does not necessarily mean that a new article had not in the factory and comes into existence only at the place or site of use. Once again, generalisation is neither possible nor desirable. 37. In the present case, what is done at the customers end is to put the article to use and what the learned counsel has described is the method and manner of use. 38. Learned Counsel is, however, correct in drawing our attention to observations of the Tribunal in some of the cases that only that activity amounts to manufacture which includes an integration resulting in emergence of a single whole but, what is a single whole in a particular case is a question of fact. Further, it is not necessary that the activity manufacture must involve some kind of fabrication. 39. It should not be forgotten that the definition of manufacture in central excise is very wide and incorporates many deeming provisions or fictions and for the same reason, in my opinion, the definition as given in central excise is not pari materia w ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
