Customs, Excise and Gold Tribunal - Mumbai
Sohum Industries Pvt. Ltd. And R.B. ... vs Commissioner Of Customs And Central ... on 4 September, 2001
Equivalent citations: 2002(141)ELT407(TRI-MUMBAI)
JUDGMENT Gowri Shankar, Member (T)
1. These appeals are against the order of the Commissioner holding that the activity undertaken by Sohum Industries Pvt. Ltd. of cutting and slitting thermal paper amounted to manufacture, on demanding duty on the resultant cut and slit rolls, and imposing penalty on the manufacturer as well as on R.B. Sugla, its director.
2. It is the contention of the counsel for the appellant that this cutting and slitting does not amount to manufacture. He relies upon the decisions of the Tribunal in CCE v. True Graph Charts Pvt. Ltd. 1999 (105) ELT 341 and CCE v. Reelco Paper Products (P) Ltd. 1989 (40) ELT 435.
3. The common ratio of these decisions is that cutting and slitting of jumbo rolls of paper into smaller rolls does not amount to manufacture. There is no change in the name, characteristics and use of paper, and no transformation into a distinct and separate commodity takes place. We have our reservations about the correctness of this view. On being asked by us, counsel for the appellant admits that the rolls of paper which the first appellant imports have by themselves of no use whatsoever. They cannot be put to any use in the size and length which they import. The appellant cuts them to the width (210 mm) and length (15 metres) which would render them suitable for use in fax machines, in the manner in which the customer would normally buy. He accepts that this 15 metres length is internationally accepted standard length for rolls of fax paper. It therefore appears to us possible to say that their activity undertaken by the appellant results in the goods being made usable and being clearly identified commercially as fax paper.
4. However we do not propose to pursue these lines of reasoning and to refer these decisions for reconsideration. This is for the reason that the appeal could be disposed of on limitation. The show cause notice dated 25.9.1998 demanded duty on the goods that the first appellant cleared during the period from September 1993 to October 1996. This appellant had filed a declaration received by the department on 21.10.1993 claiming exemption from registration on the ground that goods manufactured by it were exempted from duty by notification 49/87. The grounds on which the exemption was claimed was stated to be "slitting and cutting of duty paid jumbo rolls into smaller rolls." No doubt, as the departmental representative points out, the benefit of the exemption would not be available. However, the point is that while claiming the exemption the appellant had made known to the department its manufacturing process. From the words that we have reproduced above, the departmental officers could easily have understood what the process was that the appellant undertook. The ground in the show cause notice for invoking the extended period, that the appellant suppressed the fact that manufacture of smaller fax paper, therefore, is without basis. The extended period, therefore, was not available to the department.
5. The appeals are accordingly allowed and the impugned order set aside. Consequential relief in accordance with law.