Whether assembly of different parts of decorative lamp shades and chandeliers amounts to manufacturing?

PJ/CASE LAW/2016-17/3213

Case- COMMISSIONER OF C. EX., FARIDABAD-ll VERSUS KAPOOR LAMP SHAPE CO.

Citation- 2016 (337) E.L.T. 14 (P & H)

Brief Facts- The brief facts of the case are that the appellant appeals that procuring of various components of chandeliers lamp shades and light fittings of a particular design and packing the same in card boxes and putting logo, code no. amounts to manufacture as the identity of the original part was not visible in the market. So the duty demand and penalty in the case was raised against m/s kapoor lamp shade company.

Appellant’s Contention- the appellant contends that respondent never cleared any metal parts, glass or plastic tube, etc., and a new item with name, purpose, brand and logo, code name had emerged and the same was packed in a unit container for sale and were marketed. The identity of the original part was not visible in the market in the present case. Such activity amounts to manufacture under Section 2(f) of the Central Excise Act.
The appellant also contends that the quantity & value of clearances made by the party during 1-1-1998 to 31-3-2000 were much higher than the value of lamps purchased by them from its manufacturing unit or acquired from other sources, for trading purpose which prove the clandestine removal of goods by the party from their shop?

Respondent’s Contention- None appeared for respondent.

Reasoning of Judgement- The Tribunal has answered the question against the Revenue on the strength of the case law, laying down that assembling of different manufacturing items does not amount to a new manufacturing process and thus, M/s. Kapoor Lamp Shade Company (Factory Shop) does not manufacture any lamp shades or chandeliers. The Tribunal has held and rightly so that procuring the manufacturing items and packing them with its own brand name by the assessee, does not amount to creation of a new product which may invite the duty.
The Tribunal has further held that the demand raised by the Revenue was otherwise also barred by limitation and that the appellant cannot take shelter behind proviso to Section 11A(1) of the Central Excise Act, 1944, for it was fully aware of the existence of the assessee’s unit and its activities.

Decision- Appeal dismissed.

Comment- As per the facts of the case, the appellant contention proves to be wrong as definition of manufacture covers only some processes which amounts to manufacture as per 2(f) of the Central Excise Act. Therefore duty demand raised on M/S Kapoor lamp shade company is invalid by the appellant. There is no requirement to pay the duty by M/S Kapoor lamp shades co.

Prepared by- AKSHIT BHANDARI

Comments

PJ/CASE LAW/2016-17/3213

Post a Comment

Query