TMI Blog2021 (10) TMI 933X X X X Extracts X X X X X X X X Extracts X X X X ..... The product emerged after carrying out the activity of masking, putting code number etc. for identification, remained cigarettes only, which were procured by the appellant on payment of appropriate Central Excise duty. Since, there was no change in the name, character and use of the originally bought-out cigarettes, in our view, the process undertaken by the appellant in its factory will not be considered as a manufacturing activity, in order to fall under the scope and ambit of the definition of manufacture , defined under Section 2(f) ibid. In the case in hand, it is an admitted fact on record that excepting the process of masking and putting code number, the appellant had not undertaken any other activity to render the resultant pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the duty paid cigarettes manufactured by its competitors from open market for testing purposes. The competitor s cigarettes so procured are masked covering the competitors brand name, repacked in new pack carrying only a code number and thereafter removed for testing purpose to select panel of discerning smokers without payment of duty. In addition to the above activity, the appellant also cleared its own manufactured cigarettes for testing purpose on payment of appropriate Central Excise duty. Non-payment of duty on removal of competitor s cigarettes was objected to by the department on the ground that the activity undertaken by the appellant on such cigarettes amounts to manufacture in terms of Section 2(f) of the Central Excise Act, 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... incidental or ancillary to the completion of a manufactured product. In this case, the competitor s cigarettes procured by the appellant were masked, covering the manufacturer s brand name, repacked in new pack by putting only a code number for testing purpose to select panel of the smokers. The product emerged after carrying out the activity of masking, putting code number etc. for identification, remained cigarettes only, which were procured by the appellant on payment of appropriate Central Excise duty. Since, there was no change in the name, character and use of the originally bought-out cigarettes, in our view, the process undertaken by the appellant in its factory will not be considered as a manufacturing activity, in order to fall un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... retail pack. The main objective of carrying out the process of masking etc., by the appellant was for the purpose of testing and not for marketing of altogether new cigarettes. Hence, the basic test of marketability envisaged in Note 3 (supra) has not been satisfied. Therefore, we are of the considered view that the requirements of deemed manufacture as per Note 3 to Chapter 24 (supra) are not satisfied in this case, for levy of Central Excise duty on the disputed goods. 8. In view of above discussions, we do not find any merits in the impugned order in support of confirmation of the adjudged demands on the appellant. Thus, by setting aside the impugned order, the appeal is allowed in favour of the appellant. (Operative part of the o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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