TMI Blog2004 (11) TMI 107X X X X Extracts X X X X X X X X Extracts X X X X ..... f limitation was not applicable. It is noted in the Collector's order with reference to the price lists, and some gate-passes seized from the Make up depot, that the assessee was manufacturing identical goods in their Thane unit apart from other varieties. Additionally, with reference to sales invoices it was noted that the price quoted is inclusive of excise duty, though no excise duty was paid in respect of the goods which according to Revenue was manufactured at Madras. As noted above, looked from any angle order of the Collector as affirmed on the point involved by CEGAT does not warrant any interference being based factual conclusions which cannot be termed as perverse. The conclusions are based on relevant materials. - 4322 of 1999 - - - Dated:- 23-11-2004 - Arijit Pasayat and C.K. Thakker, JJ. [Judgment per : Arijit Pasayat, J]. - These appeals are inter-linked. In Civil Appeal No. 4322 of 1999 M/s. Kores India Ltd., Chennai (hereinafter referred to as the 'assessee') calls in question legality of the judgment rendered by the Customs, Excise and (Gold) Control Appellate Tribunal, South Zonal Bench, Chennai (in short the 'Tribunal') holding that demand for dut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ause notice related to the two products i.e. carbon papers for the period 1-3-1988 to September, 1992 and typewriter/Telex ribbons for the period 1-4-1988 to September, 1992. The present dispute relates only to typewriter/telex ribbons. 4.The CEGAT held that the cutting of ribbons in smaller size and spooling them into on the automatic spooling machines amounts to manufacture and, therefore, duty is payable on these ribbons. The conversion is done as per requirement of consumers in different spools to suit Typewriter machines of different brand names. Ribbons received by the Madras Unit cannot be supplied to the customers in the form received by merely reducing the length by cutting. It is further held that the product becomes saleable commodity only after it is spooled according to the desired sizes and, therefore, excise duty is payable as a new and distinct identity is acquired. The factual findings recorded by the Collector were affirmed. 5.In the connected appeals the stand of the assessee was accepted and the levy of duty by the Collector of Central Excise, Indore was deleted. While the Chennai Bench observed that manufacturing process was involved the New Del-hi Bench he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment. 9.In response, Mr. M. Parasaran, learned ASG, submitted that nature of activity has been analysed in great detail by the Collector and CEGAT. Taking note of the factual position it has been concluded that manufacturing activity is involved. It has been clearly established that different commercial commodity has come into existence and the commodity which was already in existence serves no purpose and no commercial use after the process. A new name and character has come into existence. The original commodity after processing does not possess original identity. It is pointed out that there cannot be bona fide doubt in the mind of assessee in not obtaining licence and not disclosing the turnovers. With clear knowledge that the process involved manufacture, the activity was undertaken and, therefore, duty was payable. It is the legal duty of the assessee to take out the licence and pay duty. It has been deliberately avoided to be done with mala fide intention and, therefore, there was clear case of suppression of facts attracting extended period of limitation. 10.In Black's Law Dictionary, (5th Edition), the word 'manufacture' has been defined as, "the process or operation o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e in relation to the manufacture. [See Collector of Central Excise, Jaipur v. Rajasthan State Chemical Works, Deedwana, Rajasthan - (1991 (4) SCC 473)]. '12.Manufacture' is a transformation of an article, which is commercially different from the one, which is converted. The essence of manufacture is the change of one object to another for the purpose of making it marketable. The essential point thus is that in manufacture something is brought into existence, which is different from that, which originally existed in the sense that the thing produced is by itself a commercially different commodity whereas in the case of processing it is not necessary to produce a commercially different article. [(See M/s. Saraswati Sugar Mills and others v. Haryana State Board and others - (1992 (1) SCC 418)]. 13.The prevalent and generally accepted test to ascertain that there is 'manufacture' is whether the change or the series of changes brought about by the application of processes take the commodity to the point where, commercially, it can no longer be regarded as the original commodity but is, instead, recognized as a distinct and new article that has emerged as a result of the process. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s are not inter-changeable. The ribbon in Jumbo rolls cannot be used in a typewriter and similarly a person who requires 30 pieces of spool ribbon will not be satisfied if he is offered Jumbo rolls of equal length. In fact, assessee has a separate unit, machinery and work force to manufacture in spool form. In that view of the matter, it was held that the process involved amounted to manufacturing. 16.At this juncture it is relevant to point out that the assessee had contended before the Collector that the inputs/raw materials used have suffered excise duty and if any duty is payab1e, they should be allowed Modvat credit and the proportionate amount on account of such credit should be deducted from the proposed demand. This plea was turned out as required documentary evidence to show that entire quantity of inputs used have suffered tax was not produced. Before CEGAT it was accepted that there was possibility that manufacturers were operating under exemption available to SSI Units and the goods would have discharged "nil" duty. It was also accepted that since the goods were received from the depots and not directly received from one factory, therefore, any duty (paying documents) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upon the facts and circumstances of a particular case. 19.It is to be noted that strong reliance was placed on Government Order passed in 1982 (10) E.L.T. 480A (GOI), dated 16-1-1982 to contend that there was bona fide plea about non-excisability. Reference was also made to the order passed by the New Delhi Bench which is the subject matter of challenge in the connected appeals and the order dated 12-4-1996 passed by a Collector who dropped the proceedings initiated. Except the Government of India's order, all other orders were passed subsequent to the issuance of the show cause notice. In this case the assessee could not have anticipated any such adjudication at the relevant point of view. Further, Government of India's order did not relate to ribbons. In any event, the Collector factually focused on the conduct of the assesses to conclude lack of bona fides. At no point of time the Department was informed about manufacturing activity undertaken at their unit at Madras as required under law and, there was suppression of facts relating to manufacturing and removal of such goods. In this context, this Collector observed as follows : "Further perusal of invoices prepared for sal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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