Neo Sack Ltd. (Export Division) Vs. Commr. of Cus. and C. Ex.

.....the extent that petitioner will furnish bank guarantee for a sum of rs. 30,00,000 and for balance execute a bond. - section 2(f): [dipak misra, k.k. lahoti & rajendra menon, jj] service tax - packaging and bottling of liquor whether amounts to manufacture within meaning of section 2(f) of central excise act 1944? finance act 932 of 1994), section 65 (76 b) (as amended on 16.6.2005) - held, the first limb of the inclusive definition of the manufacture under section 2(f) of central excise act has a very wide connotation. as the definition clause lays down an inclusive facet, the term manufacture has to be construed in a natural and plain manner and would include any process incidental or ancillary to the completion of a manufactured product. keeping in view the context in which the term manufacture has been used, it would take in its fold incidental and ancillary process in the manufacture or finishing of any manufactured product. it does not leave any room for doubt that an allied process should be integral and inextricable part of manufacture of completeness and presentability of the manufactured product. section 65(76b) of finance act used the words but it does not include. thus it is a definition which has the inclusive as well as exclusive facet. by virtue of the same it may include certain things and exclude others. it is well settled principle of law that a definition is not to be read in isolation and has to read in context of phrase which it defines, releasing that function of a definition is to give precision and certainty to the word or phrase which would otherwise be vague and uncertain. regard being had to the exclusionary fact in the finance act, though a limited one it would exclude the manufacturing process as defined under section 2(f) of the 1944 act. keeping in view the aforesaid dictionary clauses and circulars issued by the c.b.e.c. it is quite luminescent that would manufacture has to be understood in a broader sense and not to be confined..........execution of bond only and not the bank guarantee. in substance, therefore, the grievance is direction to furnish bank guarantee for rs. 60,00,000/- be quashed or in any event modified. the petitioner further states that they having deposited the full value of duty amounting to rs. 19,95,986/- with the department, they may not be forced to furnish bank guarantee for the amount in question.3. the stand of department as urged by learned counsel for the department is that the case is covered by section 143 of customs act which empowers the department to insist for bond as also security in any form. according to learned counsel, the impugned order satisfies the requirement of section 143 ibid and hence, no interference.4. heard shri a.m. mathur, learned senior counsel with shri b. pandya, learned counsel for petitioner and shri b.g. neema, learned counsel for respondents.5. learned counsel for the petitioner also stated that apart from legal submissions, even if the impugned order is modified, the petitioners may be called upon to furnish bank guarantee for a lesser amount.6. having heard the learned counsel for the parties and having examined the issue, in my opinion, the impugned order referred supra, deserves to be modified to the extent that petitioner will furnish bank guarantee for a sum of rs. 30,00,000/- and for balance execute a bond. let this be done within a period of two weeks from the date of this order. it is also directed that proceedings for final assessment which are pending in respect of the matter in question be also disposed of within a period of six months to enable the parties to work out their final liability of duty on the goods.7. with the aforesaid directions, the petition is finally disposed of.