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2026 Supreme(Online)(CESTAT) 817
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL CHANDIGARH REGIONAL BENCH - COURT NO. I
S. S. Garg, J, P. Anjani Kumar, Technical Member
Jammu & Kashmir – Appellant
Versus
Ms Gravita Metal Inc – Respondent
Excise Cross Objection Application No. 60690 of 2018 | Excise Appeal No. 61620 of 2018
For the Appellants/Petitioners: Shantanu Kumar Meena
For the Respondents: Shivang Puri
The phrase 'in relation to manufacture' in exemption notifications must be interpreted expansively, and the revenue cannot adopt inconsistent positions regarding the definition of 'manufacture' for identical products across different units.
Headnote:The case involves the interpretation of Section 3 of the Central Excise Act, 1944, and the applicability of Notification No. 214/86-CE and Notification No. 56/2002-CE. The assessee, engaged in manufacturing lead ingots, performed job work for a principal entity. The Revenue contended that the principal's activity did not constitute 'manufacture,' thereby denying the job worker the exemption benefit under Notification No. 214/86-CE. The Commissioner (Appeals) had previously set aside the Order-in-Original in favor of the assessee. The primary issue was whether the activity of the principal amounted to manufacture and whether the job worker was entitled to exemption. The court reasoned that the issue had already attained finality in the assessee's own case. It further held that the department cannot adopt inconsistent positions regarding the same product across different units and that the phrase 'in relation to manufacture' must be interpreted expansively to include activities integrally connected to the process. accordingly, we uphold the same and dismiss the appeal of the Revenue. Cross-objection is also disposed of accordingly.
| Table of Content |
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| 1. background of the appeal and facts regarding the job work and exemption claims. (Para 1 , 2 , 3) |
| 2. arguments regarding the definition of manufacture and the applicability of exemption notifications. (Para 4 , 5) |
| 3. court's observation on the finality of previous orders and the prohibition of departmental inconsistency. (Para 6 , 7) |
| 4. expansive interpretation of the phrase 'in relation to manufacture' for exemption eligibility. (Para 8) |
| 5. application of the four-fold test to determine if a process results in the manufacture of goods. (Para 9) |
| 6. final adjudication upholding the commissioner (appeals) order and dismissing the revenue's appeal. (Para 10) |
S. S. GARG :
The present appeal is filed by the Revenue against the impugned Order-in-Appeal No. JNK-EXCUS-000-APP-119-122-18-19 dated 08.06.2018 passed by the Commissioner (Appeals), Central GST, Jammu, whereby the learned Commissioner (Appeals) has allowed the appeal of the Assessee/Respondent and set aside the Order-in-Original.
2. Briefly stated facts of the present case are that the Assessee/Respondent, M/s Gravita Metal Inc., was registered with the Central Excise department and was engaged in the manufacture of Lead Ingots from battery scrap and Lead scrap. The Respondent was also undertaking job work mainly for M/s Gravita Metals ( ‘M/s GM’) under Notification No. 214/86-CE dated 25.03.1986. M/s GM processed Pig Lead Ingots (Pure Lead Ingots) and Lead Alloys Ingots mainly from Remelted Lead Ingots and was availing area based exemption under Notification No. 56/2002-CE dated 14.11.2002. As per the department, the process undertaken by M/s GM does not amount to manufacture. On this allegation, various Show Cause Notices were issued to the Respondent alleging that benefit of Notification No. 214/86-CE dated 25.03.1986 is not available to the Respondent as M/s GM is not the manufacture of any excisable goods. After following the due process, the Adjudicating Authority vide Order-in-Original dated 09.01.2017 confirmed the demand upon the Respondent. Aggrieved by the said Order-in-Original, the Respondent filed appeal before the Commissioner (Appeals) and the learned Commissioner (Appeals) vide the impugned Order-in-Appeal, has allowed the Respondent’s appeal. Hence, the Revenue is in appeal before us.
3. Heard both the parties and perused the material on record.
4. The learned Authorized Representative for the Appellant/Revenue submits that the impugned order passed by the learned Commissioner (Appeals) is not sustainable in law as the same has been passed without properly considering the Notification No. 214/86-CE dated 25.03.1986. He further submits that the earlier order passed by the Tribunal in favour of the Assessees cannot be the base to allow the appeal of the Respondent for the disputed period.
4.1 The learned Authorized Representative further submits that the leviability of the duty of excise is governed by the provisions of Section 3 of the Central Excise Act,1944 viz. (i) the goods must be excisable, (ii) the goods must be manufactured/produced and (iii) such manufacture/production must be in India. He also submits that unless these conditions are satisfied, the duty of excise cannot be levied and hence not payable.
4.2 The learned Authorized Representative further submits that in the present case, M/s GM appeared not to have manufactured the said goods and consequently, duty was not leviable on such goods and the amount shown to have been paid at the time of clearances towards duty cannot be treated as “duty”.
5. On the other hand, the learned Counsel for the Respondent submits that issue involved in the present case has already been settled by this Tribunal in the Respondent’s own case vide Final Order No. 62014-62016/2017 dated 17.10.2017 wherein it has been held that the refined lead being made by M/s GM has the exact specifications of "refined lead ingots" which are defined as per the sub-heading note to Chapter 78, requir
