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2016 (11) TMI 1091 - CESTAT MUMBAI

2016 (11) TMI 1091 - CESTAT MUMBAI - TMI - Manufacture - whether packeting of pre-determined quantity of various O Ring & U Cap seals in plastic bags would amount to manufacture or otherwise? - Clandestine removal - during the period June 1999 to March 2004, appellant had cleared Seal kits for Pneumatic Cylinders & valves without Central Excise duty - Held that: - we find that the said invoice, as raised by the supplier, clearly indicates that the O Ring & U Cap seals are manufactured and cleare .....

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urther marketable. In the absence of any note to the chapter that packeting of pre-determined quantity would amount to manufacture, this activity in our view cannot be considered as a manufacturing activity. - 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 - appeal allowed. - Appeal No. E/2646/2005-Mum - Final Order No. A/88533/2016-WZB/EB - Dated:- 17-5-2016 .....

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it 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 supp .....

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s. On an appeal, the First Appellate Authority did not agree with the contentions raised by the appellant and held that the items cleared by the appellant were termed as Seal kits which was a manufacturing activity inasmuch as that the appellant had put in a plastic cover various types of O Ring & U Cap seals which can be used for Pneumatic Cylinders & valves and the said Seal kits consists of fixed number of particular seals and hence the entire process would amount to manufacture and t .....

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ission that this activity of putting together the spares in one packet does not amount to manufacture as these O Ring & U Cap seals are already manufactured products in the hands of the manufacturer who 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 .....

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by Supreme Court 2001 (130) ELT A259 (SC) 4) CCE vs. Venelec Electromech Indus (P) Ltd. 2002 (141) ELT 156 (T) 5) Electronics Corporation of India Ltd. 2004 (167) ELT 420 (T) 6) Goetze (India) Ltd. 2004 (169) ELT 274 7) CCE vs. Geeta Engg. Works Ltd. 2011 (267) ELT 373 8) Kapoor Lamp Shade Co. 2015 (319) ELT 170 (T) 9) CCE vs. Neycer India Ltd. 2015 (320) ELT 28 (SC) 3.1. It is also his submission that the Order-in-Appeal is travelling beyond the allegation in the show-cause notice inasmuch as t .....

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seals which are packed together in a pre-determined quantity is nothing but amounting to manufacturing. He would submit that by packeting this pre-determined quantity of O Ring & U Cap seals are required for the Pneumatic Cylinders & valves sold by them and this Seal kits are used by the appellants customers in replacement of the same in the Pneumatic Cylinders & valves purchased. He would submit that the Adjudicating Authority as well as the First Appellate Authority has specifical .....

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. 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 then submit that the case in hand, packeting of different O Ring & U Cap seals will amount to manufacture as per the ratio of the Apex court in the judgment. He also submits that these O Ring & U Cap seals are specially made to order by the supplier and these O Ring & .....

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are sold by them to the customers as Seal kits. It is also undisputed that these quantities of O Ring & U Cap seals are fitted into a Pneumatic Cylinders & valves which are manufactured by the appellant and cleared on payment of appropriate duty. It is also undisputed that these O Ring & U Cap seals are manufactured by the manufacturer who avail benefit of SSI exemption. 6.1. The definition of manufacture as per Section 2(f) of Central Excise Act, 1944 for the period in question rea .....

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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 various O R .....

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