Precision Processors (India) (P) Vs. Commr. of Customs (Fepz) - Court Judgment

Excerpt:
1. heard shri chattopadhyaya, consultant for the appellant on the stay petition filed by the appellant, in this case the commissioner (customs) has confirmed the duty demand of rs. 29.94 lakhs for the period from 12.1.2000 to 20.02.2002 by a show cause notice issued on 12.8.2002. the main contention of the revenue is that processes undertaken by the appellant in their unit were not "manufacture" within the meaning of section-2(f) of the central excise act, 1944. in view of above the appellants were not eligible to have the exemption under notification no.2/95-ce dated 4.1.95. the commissioner has also imposed an equal amount of penalty on the appellant. the commissioner has ordered them to pay the appropriate interest under section 28ab of the customs act and have also imposed a personal penalty of rs. 1.00 lakh on the director of the said unit. shri chattopadhyaya has taken us to the various portions of the order passed by the commissioner of customs. his submission is that the commissioner has passed the order only on the ground that the activities carried out by the processes undertaken by the appellant are not "manufacture" within the meaning of section - 2 (f) of the central excise act. he submits that manufacture has been defined in the para 3.31 of the exim policy as follow: "manufacture means to make, produce, fabricate, assemble, processes or bring into existence, by hand or by machine, a new product having a distinctive name, character or use and shall include process, such as refrigeration, re-packing, polishing, leveling and segregation. 'manufacture', for the purpose of this policy shall also include agriculture, aquaculture, animal husbandry, floriculture, horticulture, pisciculture, poultry, sericulture, viticulture and mining".the word "manufacture' has got a wide ramification. hence, the processes undertaken by the appellants are to be treated as "manufacture". the process of slitting the jumbo rolls into smaller rolls, sheets and allied processes including packing etc. is surely 'manufacture'.he submits that the word "manufacture" has got a wider ramification than what is contained in the section 2 (f) of the central excise act.the process of slitting the jumbo rolls into smaller rolls, sheets and allied processes including packing should cover under the 'manufacture'. he, further, submits that board's circular no.314/30/97-cx dated 6.5.97 does not confine manufacture under section 2(f) of the central excise act. in support of this he cites two decisions of the tribunal: oracle infotech (p) ltd. v. commr. of c.ex., new delhi reported in 2003 (151) e.l.t 656 (tri.-del.) and super cassettes industries ltd. v. commr. of customs, new delhi reported in 1998 (104) e.l.t. 115 (tribunal).he, further, submits that as all the demand in this case is barred by limitation as when the goods were cleared to d.t.a., the custom authorities have assessed the goods to duty and hence no suppression was made in their case. he, further, relies to tribunal's observations in gujarat texspin ltd. v. commr. of central excise & customs, surat-i reported in 2003 (160) e.l.t. 193 (tri.-mumbai) wherein it has been held that adjudicating officer cannot sit in judgment over the permission granted by the development commissioner. if department is aggrieved by permission, it should confirm demand only after taking up the matter with the devp. commissioner. in this case, there is no evidence that the matter was taken up with the devp. commissioner at any stage before the commissioner passed its adjudication order. in view of above, the consultant requests that they have a prima facie case in their favour and stay may be granted to them.2. shri sanyal, learned jdr reiterates the findings of the commissioner in his adjudication order.3. we have heard both the sides and after hearing them and perusal of the records. we find appellant have cleared goods to d.t.a. sales only after their assessment by the customs authorities. the case laws referred by the consultant are applicable in their case and as such, they have prima facie case in their favour. in view of above, we dispense with the duty and the penalty till further orde rs. case to come up for regular hearing on 24th of february, 2005.

Judgment:
1. Heard Shri Chattopadhyaya, Consultant for the Appellant on the Stay Petition filed by the Appellant, In this case the Commissioner (Customs) has confirmed the duty demand of Rs. 29.94 Lakhs for the period from 12.1.2000 to 20.02.2002 by a show cause notice issued on 12.8.2002. The main contention of the Revenue is that processes undertaken by the appellant in their unit were not "manufacture" within the meaning of Section-2(f) of the Central Excise Act, 1944. In view of above the Appellants were not eligible to have the exemption under Notification No.2/95-CE dated 4.1.95. The Commissioner has also imposed an equal amount of penalty on the Appellant. The Commissioner has ordered them to pay the appropriate interest under Section 28AB of the Customs Act and have also imposed a personal penalty of Rs. 1.00 Lakh on the Director of the said unit. Shri Chattopadhyaya has taken us to the various portions of the order passed by the Commissioner of Customs. His submission is that the Commissioner has passed the order only on the ground that the activities carried out by the processes undertaken by the appellant are not "manufacture" within the meaning of Section - 2 (f) of the Central Excise Act. He submits that manufacture has been defined in the para 3.31 of the Exim Policy as follow: "Manufacture means to make, produce, fabricate, assemble, processes or bring into existence, by hand or by machine, a new product having a distinctive name, character or use and shall include process, such as refrigeration, re-packing, polishing, leveling and segregation.

'Manufacture', for the purpose of this policy shall also include Agriculture, Aquaculture, Animal Husbandry, Floriculture, Horticulture, Pisciculture, Poultry, Sericulture, Viticulture and mining".

The word "manufacture' has got a wide ramification. Hence, the processes undertaken by the appellants are to be treated as "manufacture". The process of slitting the Jumbo Rolls into smaller rolls, sheets and allied processes including packing etc. is surely 'manufacture'.

He submits that the word "manufacture" has got a wider ramification than what is contained in the Section 2 (f) of the Central Excise Act.

The process of slitting the Jumbo Rolls into smaller rolls, sheets and allied processes including packing should cover under the 'manufacture'. He, further, submits that Board's Circular No.314/30/97-CX dated 6.5.97 does not confine manufacture under Section 2(f) of the Central Excise Act. In support of this he cites two decisions of the Tribunal: Oracle Infotech (p) Ltd. v. Commr. of C.Ex., New Delhi reported in 2003 (151) E.L.T 656 (Tri.-Del.) and Super Cassettes industries Ltd. v. Commr. of Customs, New Delhi reported in 1998 (104) E.L.T. 115 (Tribunal).

He, further, submits that as all the demand in this case is barred by limitation as when the goods were cleared to D.T.A., the Custom Authorities have assessed the goods to duty and hence no suppression was made in their case. He, further, relies to Tribunal's observations in Gujarat Texspin Ltd. v. Commr. of central Excise & Customs, Surat-I Reported in 2003 (160) E.L.T. 193 (Tri.-Mumbai) wherein it has been held that Adjudicating Officer cannot sit in judgment over the permission granted by the Development Commissioner. If Department is aggrieved by permission, it should confirm demand only after taking up the matter with the Devp. Commissioner. In this case, there is no evidence that the matter was taken up with the Devp. Commissioner at any stage before the Commissioner passed its adjudication order. In view of above, the Consultant requests that they have a prima facie case in their favour and stay may be granted to them.

2. Shri Sanyal, learned JDR reiterates the findings of the Commissioner in his Adjudication order.

3. we have heard both the sides and after hearing them and perusal of the records. we find appellant have cleared goods to D.T.A. Sales only after their assessment by the Customs Authorities. The Case Laws referred by the Consultant are applicable in their case and as such, they have prima facie case in their favour. In view of above, we dispense with the duty and the penalty till further orde Rs. Case to come up for regular hearing on 24th of February, 2005.