9911796707
TMI Blog2016 (11) TMI 1091X X X X Extracts X X X X X X X X Extracts X X X X ..... ves and discharged appropriate Central Excise duty. During the EA 2000 audit of the assessee, it was observed that during the period June 1999 to March 2004, appellant had cleared Seal kits for Pneumatic Cylinders & valves without Central Excise duty. This was brought to the notice of the appellant by the audit party, in response to which the appellant contended that the said Seal kits were combination of O Ring & U Cap seals etc. which were bought out items and not manufactured and these were given as replacement in the Pneumatic Cylinders & valves supplied by them to the customers. The appellant also contended that this Seal kits were supplied to their customers in the form they had received and no excise duty is liable to be paid as th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has supplied the same to appellant. He would draw our attention to the various bills and challans raised by the supplier who is the manufacturer after showing us the specimen sample of Seal kits. He would submit that the packeting or putting together pre-determined quantity of O Ring & U Cap seals would not amount to manufacture even by extending definition of the term manufacture under Section 2(f) of Central Excise Act, 1944. He would then submit that no process of manufacture is involved in packaging of the rubber seals in plastic bag. He would rely upon the following citations:- 1) XI Telecom Ltd. 1999 (105) ELT 263 (AP) 2) Dalmia Industries Ltd. 1999 (112) ELT 305 (T) maintained by Supreme Court 2005 (184) ELT A37 (SC) 3) TI Diam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irst Appellate Authority has specifically recorded that the Seal kits were words given by the appellant for packeting of the O Ring & U Cap seals, hence the said packet of Seal kits is a product which became manufactured items. He would rely upon the Tribunals decision in Sriram Pistons & Rings Ltd. 2004 (164) ELT 289 for the proposition that supply of piston ring sets in accordance with the specification would amount to manufacture. He would rely upon the judgment of the Supreme Court in the case of Empire Industries Ltd. vs. UOI 1985 (20) ELT 179 for the proposition that transformation of an object into a different commercial commodity is sufficient to constitute manufacture under Section 2(f) of the Central Excise and Salt Act. He would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Central Excise Tariff Act, 1985 (5 of 1986) as amounting to [manufacture; or [(iii) which, in relation to the goods specified in the Third Schedule, involves packing or repacking of such goods in a unit container or labelling or re-labelling of containers including the declaration or alteration of retail sale price on it or adoption of any other treatment on the goods to render the product marketable to the consumer, and the word manufacturer shall be construed accordingly and shall include not only a person who employs hired labour in the production or manufacture of excisable goods, but also any person who engages in their production or manufacture on his own account." 6.2. The finding of both lower authorities that the packeting of v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held by the apex court in 2005 (184) ELT A37 (SC). Similar view was expressed by the apex court in CCE vs. Neycer India Ltd. (supra).
7. In our considered view, O Ring & U Cap seals which were purchased by the appellant from various manufacturers and packeting the same as spares would not amount to manufacture by any stretch of imagination.
8. Since we have disposed of the appeal on its merits, we are not recording any finding on various other submissions made by both sides.
9. In view of the foregoing, in the facts and circumstances of this case we hold that the impugned order is unsustainable and liable to be set aside and we do so.
10. The impugned order is set aside and the appeal is allowed.
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