Judgment

Kapadia, J.—The short question which arises for determination in these civil appeals filed under section 35L (b) of the Central Excise Act, 1944 is – whether powdering of Low Density Polyethylene (LDPE) and High Density Polyethylene (HDPE) granules into moulding powder amounts to “manufacture”.

2. Assessee manufactures plastic water storage tanks and toys. On 24.4.1997, the factory of the assessee was visited by Officers of Anti Evasion Branch of Central Excise Commissionerate, Delhi. During this visit, it was noticed that the assessee had installed the injection, moulding, extruding and pulverizing machines, operated with electric power, to handle plastic inputs and produce moulded shapes for manufacturing toys, water storage tanks, desks, tables etc. On enquiry, the process revealed that the moulding machine accepted the plastic input only and since the inputs, consisting of LDPE and plastic colouring material, were procured in the granular form, the same was first required to be intermixed in specified proportion and then pulverized to produce the moulding powder. This was done with extruders and pulverizers. After receiving the two inputs, the extruder through hoopers me