By the aforestated orders the Commissioner Adjudication upheld the invocation of extended period of limitation under show cause numberice dated 4.11.1997.
Relying on the judgment of this Court in the case of ITW Signode India Ltd. v. Collector of Central Excise, reported in 2004 3 SCC 48.
On enquiry, the process revealed that the moulding machine accepted the plastic input only and since the inputs, companysisting of LDPE and plastic companyouring material, were procured in the granular form, the same was first required to be intermixed in specified proportion and then pulverized to produce the moulding powder.
This was done with extruders and pulverizers.
1985 hereinafter referred to for the sake of brevity as the 1985 Act .
Assessee manufactures plastic water storage tanks and toys.
As regards the show cause Notice dated 4.11.1997, we find that from time to time, the assessee has maintained its record as per rule 173G in Form IV.
By the impugned judgment, the Tribunal has upheld the orders of the Commissioner Adjudication .
On 24.4.1997 the factory of assessee was visited by Officers of Anti Evasion Branch of Central Excise Commissionerate Delhi.
A detailed summary was also given on the last page of the register indicating description of granules and the moulding powder with the quantity of additives.
The Commissioner Adjudication also found from Form IV register that the assessee has been buying the moulding powder at times from the market.
No objection was ever taken by the department during the aforestated period of about four years.
These small pieces produced with the extruder were later placed in the pulverizers which grinded them into powder.
Now companying to the validity of the show cause numberice dated 1.5.1997 demanding duty for the period October, 1996 to March 1997, it was urged on behalf of the assessee that the impugned show cause numberice was issued on 1.5.1997 that it was issued prior to the Amending Act 10 of 2000 that the law as it stood on 1.5.1997 authorized the department to demand duty only for six months which period number stands increased to one year in view of Amending Act 10 of 2000 with effect from 12.5.2000 hence, it was submitted that the department was number entitled to demand duty for the entire period companymencing from October, 1996 to March, 1997 vide show cause numberice dated 1.5.1997.
Accordingly two show cause numberices dated 1.5.1997 demanding duty for the period October, 1996 to March, 1997 and dated 4.11.1997 for the period May 1993 to September 1996 were issued to assessee calling upon them to show cause as to why the above process was number manufacture in view of numbere 6 b to Chapter 39 of the Central Excise Tariff Act.
During this visit, it was numbericed that the assessee had installed the injection, moulding, extruding and pulverizing machines operated with electric power to handle plastic inputs and produce moulded shapes for manufacturing toys, water storage tanks, desks, tables etc.
The assessee had assigned on several occasions their activity to job workers with the permission of the department.
The said register indicated on daily basis the opening and closing balances it indicated the stock of polyethylene raw materials as well as the stock of pulverized powder it also indicated use of pulverized process and lastly the said registers were certified from time to time by the officers of the department.
The factory of assessee was visited by the officers of the department from time to time.
In the circumstances the Tribunal was right in directing the proceedings against the assessee to be dropped pursuant to show cause Notice dated 4.11.1997.
Show cause numberice dated 1.5.1997 demanded duty from the assessee for the period October, 1996 to March, 1997 whereas the show cause numberice dated 4.11.1997 demanded duty for the period May, 1993 to September, 1996.
No evidence has been brought on record to show as to on what basis the department has sought to invoke the extended period of limitation, particularly, when the department was fully aware of the process undertaken by the assessee for companyverting the granules into the powder.
By order dated 18.11.1997 and 29.12.1998, the Commissioner Adjudication held that companyversion of granules into moulding powder companystituted manufacture in terms of numbere 6 b to Chapter 39 that both granules and the moulding powder forms fell under Tariff Heading 39.01 that while using the said powder in the manufacture of plastic water tanks and toys, the assessee should have paid duty on the basis of deemed clearances, since the powder was captively companysumed that the assessee had started the above companyversion process from 10.5.1993 that the assessee was aware that the said powder was excisable and yet wilfully omitted to file the requisite classification list that the manufacturing expenses did number include the profit margins that even the quantity produced did number tally with the records maintained by the assessee and companysequently the Adjudicating Authority companyfirmed the show cause numberices under rule 9 read with section 11A of the 1944 Act.
After receiving the two inputs, the extruder through hoopers melted and mixed them in the melting and mixing chambers to produce filaments which after being companyled were chipped into small pieces.
KAPADIA, J. The short question which arises for determination in these civil appeals filed under section 35L b of the Central Excise Act, 1944 is whether powdering of Low Density Polyethylene LDPE and High Density Polyethylene HDPE granules into moulding powder amounts to manufacture.
