Full Judgment
"whether in view of the fact, that when operation/process conducted result in changes in sub-heading classification, then considering the Supreme Court decision in the case of M/s J.G. Glass Industries, M/s Laminated Packings (P) Ltd. and M/s Sonic Electrochem (P) Ltd. whether manufacture under Central Excise Act, 1946 would take place to cause and call for levy of duty once again on embossed cut to shape and size aluminium foil in cigarette industry." The said question has been referred to Larger Bench because this Tribunal in the case of C.C.E. Mumbaij v. Godfrey Philips Ltd. reported in 2003 (156) E.L.T. 1026 (T) has held that such activity does not amount to manufacture merely because of meeting of change tariff entry.
The view taken by the referring Bench is contrary to the view taken in Godfrey Philips Ltd. 3. Shri K.K. Srivastava, learned J.D.R. appearing for the Revenue inter alia submitted that the tariff heading changes because cut to shape and size aluminium foil in which the cigarettes are packed is embossed with the word 'pull'. The appellants were paying duty before the order passed by the Assistant Commissioner. He relied on the following decisions :----------------------------------------------------------------------------Sr. Name of the party Case Law RemarksNo.1. Union of India v. 2002 (145) He mainly relied on the Para 9 of the Sonic Electrochem E.L.T. 274 said decision and submitted that the (P) Ltd. fact that the product in question is generally not being bought and sold2. Union of India v. 1998 (97) 'Printing' whether a process J.G. Glass E.L.T. 5 amounting to "manufacture" - Test Industries Ltd. (S.C.) is whether the product would serve any purpose but for the printing - If3. Punjab National 1988 (37) Merely because the goods are not Fertilisers E.L.T. & 155 (Tribunal) standard purity, they cannot be Chemicals Ltd. treated unmarketable. Similarly, if the entire production is consumed4. Laminated 1990 (49) Lamination indisputably by well Packings (P) Ltd. E.L.T. 326 settled principles of excise law, (S.C.) amounts to manufacture.
therefore it is liable to excise duty.
The contention that duty paid kraft 4. He submitted that in view of the above decisions the item in question amounts to manufacture and is excisable.
5. Shri R. Nambirajan, learned Advocate appearing for the respondent inter alia submitted that the Commissioner (Appeals) in his order has clearly recorded that the process involved is a single in-situ process.
That is to say that the process involved is a continuous process and as such aluminium foil cannot be assessed separately. Drawing the analogy from the Board's Circular No. 11/89 dtd. 30/03/1989, he submitted that aluminium foil cannot be assessed separately.
The packed cigarette is to be assessed. To support his contention he placed reliance on the following decisions:----------------------------------------------------------------------------------Sr.
Name of the party Case Law RemarksNo.---------------------------------------------------------------------------------1.
Moti Laminates 1995 (76) E.L.T.He submitted that 'Manufacture' or Pvt. Ltd. v. 241 (S.C.) 'production' means bringing out a C.C.E. new commodity which must be Ahmedabad useable, moveable,2.
C.C.E. Bombay 1998 (98) E.L.T.He submitted that rigid polyurethane v. Milton 540 (Tribunal) (PU) foam formed by situ process is Polyplas (India) not excisable since the product Pvt. Ltd. cannot be marketed and is not marketable.3.
CCE. Chadigarh 1995 (79) E.L.T.Liquid milk is filled in the poly v. Milk Plant 315 (tribunal) pouches on a machine which forms the pouch, fills the milk and seals4.
C.C.E. 1996 (87) E.L.T.Printing of Aluminium foil not Ahmedabad v. 432 (Tribunal) amounts to 'manufacture', a new Printorium and distinct commercially--------------------------------------------------------------------------------- 6. As regards the reliance of the J.D.R. on the Punjab National Fertilisers & Chemicals Ltd. reported in 1988 (37) E.L.T. 155 (T), he submitted that it is no more good law because the decision has already been overruled by the Supreme Court as reported in 1997 E.L.T. A-245 (S.C.) He also contended that since an item falls in different headings, it should not be construed that it amounts to manufacture. In this regard he relied on the decision in the case of C.C.E.Chandigarh-I v. Markfed Vanaspati & Allied Indus. 2003 (153) E.L.T. 491 (S.C.). As regards the decision of Johnson & Johnson Ltd. the learned counsel submitted the said decision has also been overruled by the Supreme Court as reported in 1997 (94) E.L.T. 286 (S.C.) whereas on the other hand the decision in the case of Printorium has been approved by the Supreme Court. He forcefully contended that no evidence has been brought on record by the Department that a new product has emerged.
Therefore, he contended that in view of the legal position as mentioned above he is reiterating the order passed in C.C.E. Mumbai v. Godfrey Philips Ltd., holding that such activity does not amount to manufacture.
7. After hearing, perusal of the records and the case laws relied on by both the sides, we find that the product in question is a result of an integrated and continuous process and the same cannot be assessed separately, particularly in view of the fact that the cigarette is assessed in a packed condition. Besides, we also notice that the Department has brought no evidence on record to prove that the new product has emerged out of the process employed. Therefore, relying on the case laws cited by the learned counsel, we are of the opinion that the decision in the case of C.C.E. Mumbai v. Godfrey Philips (I) Ltd. reported in 2003 (156) E.L.T. 1026 (T) needs to be approved. We order accordingly.