Order date – 07 September 2022

Facts – 

• The appellant, Grp Limited, procure rubber dust. The Rubber dust is sieved & grinded/crushed and accordingly, the Crumbed Rubber Powder is obtained. It is also known as Tread Rubber Powder. The properties of the goods remain the same even after grinding process. There is no chemical reaction in the crushing process. By this process, only physical form is changed.
• The SCNs have been issued proposing to demand C. Ex. duty on the said product relying on the definition of 'Excisable Goods' as prescribed under clause (d) of Section 2 of the CEA, 1944 which was amended by adding an explanation that for the purposes of this clause, 'goods' include any article, material or substance which is capable of being bought and sold for a consideration and such goods shall be deemed to be marketable.
• The order for recovery of interest was passed and penalty was imposed.
• Aggrieved, the appellant filed an appeal.

Issue – 

• Whether the process taken by Appellant does not amount the manufacture, so they are not liable to pay Central excise duty?

Order – 

• The Appellant authority observed that the entire dispute is settled by the Tribunal in appellant’s own case in Gujarat Reclaim Rubber Products Ltd. Vs. CCE in which it was held that “a simple act of crushing and powdering like this one should not in our opinion be taken to be synonymous with creation of a new product, therefore demand for duty was held to be not sustainable”.
• The same order was later upheld by the Hon’ble Supreme Court.
• Therefore, it was held that in the impugned order the Commissioner (Appeals) has totally ignored the case laws cited by the appellant including that in their own case. The Commissioner (Appeals) has relied solely on Circular of CBEC explaining the definition of manufacture. 
• Since the issue is identical to the cases decided earlier in appellant’s own case thrice, respectfully following the said decisions, the appeals were allowed.