S.C. Dharmadhikari, J.

1. These two matters can be disposed of by a common order.

2. We take up first Central Excise Appeal No.179 of 2014. Having heard both sides and perusing the order of the Tribunal we proceed to admit this appeal on the following substantial questions of law:

[i] Whether, under the facts and circumstances of the case, the Appellate Tribunal erred in committing yet another instance of judicial indiscipline by not following binding precedent in case of S.D. Fine Chemicals affirmed by the Hon'ble Supreme Court which was followed in the decision of the Appellate Tribunal in case of E. Merck under identical facts for the past period, which had attained finality since no appeal was filed against that decision?

[ii] Whether, under the facts and circumstances of the case, the Appellate Tribunal is correct in allowing the Respondent to argue & lead evidence as regards percentage of value addition achieved in the processes undertaken, at the final hearing stage, especially when such an allegation was never raised either in show cause notice or in the appeal filed before it and no evidence was led at any earlier stage?

[iii] Whether, under the facts and circumstances of the case, the Appellate Tribunal is justified in holding that activity of purification undertaken by the Appellants amounts to manufacture in terms of Section 2(f) of Central Excise Act, 1944 and accordingly, clearances of purified goods attracts payment of Central Excise duty?

3. With the consent of both sides, we dispose of this Central Excise Appeal finally. In the light of the order passed in the Central Excise Appeal, the controversy in the Writ Petition would be academic.

4. The appellants have pointed out that they are engaged in the activity of purification of excise duty paid Hexane and Petroleum Ether, which are supplied to them on free of costs basis by M/s. Merck Specialties Private Limited (for short, “M/s.Merck”). The appellants carry out purification, if required, on job work basis. During the relevant period, M/s. Merck purchased the above goods, namely, Hexane and Petroleum Ether from various suppliers and directed the suppliers to transport the said goods to the appellants. In addition M/s. Merck also supplied purified Hexane and Petroleum Ether to the appellants for laboratory testing and repacking purposes. The appellants have stated as to how the job work assigned to them has been carried out and they claimed that the process of purification of Hexane and Petroleum Ether as well as that of repacking from bulk to smaller/retail packs does not amount to “manufacture” within the meaning of Section 2(f) of the Central Excise Act, 1944. The appellants claimed that these purified Hexane and Petroleum Ether obtained from duty paid Hexane and Petroleum Ether are cleared from the factory of the appellants in the name of grades such as Guaranteed Reagent Hexane for Chromatography Lichrosolv grades.

5. The appellants have described the entire process and which they claim as job work on and of M/s. Merck. We need not advert to those details and which are set out till page-9 of the appeal paper book (para-6.5).

6. The appellants pointed out that in the past the Revenue had sought recovery of duty on the reprocessed and repacked Hexane and Petroleum Ether relying upon the erstwhile Central Excise Rules, 1944 and the Central Excise Rules, 2002 prevalent at present. The appellants have been registered with the Department in terms of both the earlier and the prevalent Rules, namely, Central Excise Rules, 2002. The appellants pointed out that M/s. Merck had obtained loan license as a manufacturer in the premises of the appellants. Besides Hexane and Petroleum Ether, the appellants were also receiving some other chemicals for purification in respect of which there is no dispute. M/s. Merck filed declaration under Rule 173C of the erstwhile Central Excise Rules, 1944 in the capacity of a principal manufacturer in the unit of the appellants. In th