Order date – 29 September 2022

Key Pointers – 

• The Appellant, Asmaco Industries Limited, is in the business of manufacturing of ‘tape’ of several varieties and proceedings were initiated against them for having cleared ‘masking tape (crepe paper)’ without payment of duties of central excise on the claim that these had been merely slit from the ‘jumbo rolls’ imported on payment of appropriate duties of customs.
• In the show cause notice dated 23rd January 2001, it was alleged that the ‘masking tape’, liable to duty of 16% corresponding to sub-heading 4823 90 of the Schedule to Central Excise Tariff Act, 1985 and cleared between January 2000 and October 2000, should be subjected to recovery of ₹ 4,60,512 under section 11A of Central Excise Act, 1944, along with interest under section 11AA of Central Excise Act 1944, besides the assessee being imposed with penalty under rule 173Q/209 of Central Excise Rules, 1944.
• The issue involved in this case is regarding classification to fasten rate of duty other than ‘nil’ and that of ‘manufacture’ to fasten excitability.
• The Tribunal held that the process of slitting jumbo rolls does not amount to manufacture within the meaning of section 2(f) of Central Excise Act, 1944. There are no fresh developments that induce us to consider any proposition to the contrary.
• Also, the Tribunal observed that the administrative authority has failed to instill and inculcate such essence in adjudicating authorities could not be more apparent, therefore they directed that if it be an aberration, appellate rectification would pass muster but if it be symptom of a larger malaise, the cost to the system should awaken the Central Board of Indirect Taxes & Customs (CBIC) to the approaching crisis and deal with it appropriately.