TMI Blog2018 (7) TMI 1595X X X X Extracts X X X X X X X X Extracts X X X X ..... rally and to convert it into crumb rubber. The burden to prove that there is manufacture is not discharged by the department beyond reasonable doubt - whereas the appellants have produced the certificate issued by the Rubber Board but the department has not produced any evidence to negate the certificate thus issued. The conversion of scrap rubber into rubber powder does not amount to manufacture as the department’s basic contention on the manufacture itself does not flows water other arguments - appeal allowed - decided in favor of appellant. - E/596/2007-DB - - - Dated:- 24-7-2018 - Hon'ble Mr. S. S. Garg, Judicial Member And Hon'ble Mr. P. Anjani Kumar, Technical Member Mr. Kuriyan Thomas, Advocate For the Appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the purpose of Notification No.8/2003 dated 1.3.2003. The appellants have produced a certificate from the Rubber Board which clearly stated that there is no process of manufacture involved in the said conversion. The appellants further submitted that the crumb rubber cleared by them is not to be treated as excisable goods for the purpose of Notification No.8/2003. The appellants also submitted that in case CESTAT opines that the findings of the Order-in-Original are correct, the differential duty payable by them would only be ₹ 6,34,810/- as they have already paid ₹ 13,54,109/- through cash and ₹ 48,64,069/- by way of CENVAT credit which the Commissioner held to be proper. 3. The learned counsel for the appellants submi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the production of crumb rubber does not amount to manufacture. They have relied upon the following case laws: CCE s. Markfed Vanaspati Allied Indus: 2003 (153) ELT 491 (SC) Sandur Manganese vs. CCE: 2004 (168) ELT 75 CCE vs. United Phosphorous: 2000 (117) ELT 529 (SC) In re Gujarat Narmada Valley: 2005 (184) ELT 128 (SC-FB) CCE vs. Jagajit Industries: 2002 (141) ELT 306 (SC) 3.2 They further submitted that certificate given by the Rubber Board being in the nature of expert evidence needs to be followed in the absence of contrary evidence produced by the department. They have relied upon the following case laws: CCE vs. International Tobacco Co. Ltd.: 2008 (231) ELT 207 (SC) Security Paper Mills vs. C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g, blending, reduction of size, drying and packing (for transport and marketing). The clarification issued by the Rubber Board, vide their letter ref No.CM/3/2007 dated 6.2.2007, also gives the same processes as being involved in the conversion of scrap rubber into crumb rubber. In my opinion, the above processes come within the ambit of manufacture as per the definition of given supra. The scrap of rubber, as it is collected from the rubber estates are not being used by the manufacturers of articles of rubber. The scrap contains a lot of impurities, which are eliminated during the process of conversion into crumb rubber. Also the scrap, in different forms like shell scrap, tree laces and cup lumps, lose their individual identity during the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat Supreme Court in the case of CCE s. Markfed Vanaspati Allied Indus (supra) has held that the burden to prove that there is manufacture is on the Revenue and merely because an item falls in the tariff entry, manufacture must not be deemed. We also find that Hon ble Tribunal in Elgi Rubber Products Ltd. (supra) has held that the activity of manufacturing powder form by crushing the old rubber is neither commercial nor chemically a new product. We find that though the process discussed in these cases is not of manufacture of crumb rubber from scrap rubber, the issue discussed is very much similar. If conversion of old rubber into crumb rubber powder does not amount to manufacture, a process of manufacturing crumb rubber from scrap rubber ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1944. However, it will throw a light on the way to approach such an issue as held by the Supreme Court and the Tribunal as discussed above. The process of converting scrap rubber to crumb rubber powder does not amount to manufacture. The process in dispute in the impugned order being similar should also be held not to amounting to manufacture. Moreover, as contended by the appellants, the department has not produced any certificate or opinion by an expert in the field to counter the contentions of the appellant. The learned Commissioner has merely attempted to lift one or two sentences from the certificate issued by the Rubber Board saying that the certificate supports the department s claim that the conversion of scrap rubber to crumb rub ..... X X X X Extracts X X X X X X X X Extracts X X X X
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