Garware Polyster Ltd. Vs. Commissioner of Central Excise and - Court Judgment

Excerpt:

.....the process undertaken by the applicant of cutting and slitting jumbo rolls of polyester film, in order to obtain sheets of size a4, amounts to manufacture. the contention of the counsel for the applicant is that this process of physically changing in the size of the plastic film does not itself amount to manufacture. he cites the decision of the tribunal in s.r. tissues pvt. ltd vs. cce 2001(94) ecr 427 and circular 15/89 dated 24.2.1989. in the cited decision, the tribunal had held that, notwithstanding the separate heading provided in the tariff for facial tissues, cutting and slitting jumbo rolls of tissue paper, in order to obtain facial tissues and paper napkins does not amount to manufacture. the board's circular 15/89 has, modifying its earlier circular, said that the process of perforation of jumbo rolls for cinematographic films which was required for the film to be transported in movie cameras and movie projectors rendered it a different product liable to duty. by inference, therefore, the circular says that cutting and slitting per se of the jumbo rolls could not by itself amount to manufacture.3. in addition, the demand is barred by limitation. the views expressed.....

Judgment:

1. Duty of Rs. 3.79 crores, and equivalent penalty under Section 11AC of the Act are required to be deposited.

2. The demand for duty, and imposition of penalty, has arisen in consequence of the finding of the Commissioner that the process undertaken by the applicant of cutting and slitting jumbo rolls of polyester film, in order to obtain sheets of size A4, amounts to manufacture. The contention of the counsel for the applicant is that this process of physically changing in the size of the plastic film does not itself amount to manufacture. He cites the decision of the Tribunal in S.R. Tissues Pvt. Ltd vs. CCE 2001(94) ECR 427 and circular 15/89 dated 24.2.1989. In the cited decision, the Tribunal had held that, notwithstanding the separate heading provided in the tariff for facial tissues, cutting and slitting jumbo rolls of tissue paper, in order to obtain facial tissues and paper napkins does not amount to manufacture. The Board's circular 15/89 has, modifying its earlier circular, said that the process of perforation of jumbo rolls for cinematographic films which was required for the film to be transported in movie cameras and movie projectors rendered it a different product liable to duty. By inference, therefore, the circular says that cutting and slitting per se of the jumbo rolls could not by itself amount to manufacture.

3. In addition, the demand is barred by limitation. The views expressed in the decision and therefore prime facie prevail to what the department's contention that it is upon the act of cutting of film into the requisite A4 size renders capable of use as an overhead transparency film for use with such projectors. The notice dated 2.5.2000 seeks to demand duty on clearances between July 1995 and March 2000 and invoked the extended period contained in the proviso to Section 11A on the ground that the applicant "misclassified" the goods.

The applicant had clearly indicated, as a part of the classification list filed by it from 1994 onwards the process that undertaken, and in 1994 this classification was approved. Prima facie therefore all the information required for the department to decide the classification had been given to it.

4. Accordingly, we waive deposit of the duty demanded, and penalty imposed, and stay their recovery.

5. We accept the prayer made by the counsel for the applicant for out of turn hearing on the ground of the revenue involved and the recurring nature of the dispute and list the appeal for hearing on 2001.