By TIOL News Service

CHENNAI, AUG 04, 2018: ASSESSEE supplied raw materials namely poly propylene granules, filler materials and colour batches to M/s. Premier Polysacks Pvt. Ltd. under job work challans for conversion of raw materials into PP packs / sacks under Notfn 214/1986-CE. Notfn 83/1994-CE grants exemption from payment of central excise duty from the whole of central excise duty to those goods exempted under SSI Notfn 8/2003-CE when manufactured on job work basis.

The department viewed that since fully finished PP bags / sacks were received from job worker namely M/s. PPP Ltd. and the same were not subjected to any process in premises of assessee other than printing the names of customers on the sacks and which activity does not amounting to manufacture, the assessee is not eligible for benefit of SSI exemption as per Notfn 8/2003-CE.

The Original authority confirmed the demand along with interest and penalties but the Commissioner(A) set aside the order.

Revenue is, therefore, before the CESTAT and submits that the activity of printing on the bags the names of the customers does not amount to manufacture in view of the apex court decision in J G Glass Industries Ltd. 2002-TIOL-112-SC-CX and, therefore, the demand needs to be upheld.

Assessee submitted that they were not merely printing the names of customers on the bags but were also undertaking the packing of the sacks which activity is deemed manufacture and, hence they have rightly availed the SSI exemption benefit under Notfn 8/2003. Reliance is placed on the apex court decision in Fitrite Packers 2015-TIOL-235-SC-CX , in support.

The CESTAT observed that it is not disputed that along with printing the names of the customers on the sacks packing activity was also being conducted by the respondent assessee. And, therefore, the decision cited by the AR (of J G Glass Industries (supra)) is not applicable since it only related to printing.

The apex court decision in Fitrite Packers (supra) which had considered the decision in J G Glass Industries (supra) was extracted by the Bench and by following the same, it was concluded that the order passed by the Commissioner(A) needed no interference.

The appeals filed by the department were dismissed .

(See 2018-TIOL-2407-CESTAT-MAD)