ESSEL PROPACK LTD Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) These appeals are filed under Section 35L(b) of the Central Excise Act, 1944 (for short "the Act"), against the order dated 30th January, 2003 of the Customs,0000 Excise & Gold (Control) Appellate Tribunal (for short "the Tribunal"), West Zonal Bench at Mumbai.

(2.) The appellant manufactured plastic tubes in its factory and supplied the same to M/s Colgate Palmolive (I) Ltd. (for short "Colgate"). After considering the reply to the show cause notices, the Commissioner of Central Excise, Mumbai III, passed an order dated 17th July, 1997, confirming the demand of excise duty amounting to Rs.54,30,713/- and imposing a penalty of Rs.41,00,000/- under Rule 173-Q of the Central Excise Rules, 1944 and also directing the appellant to pay interest at the rate of 20% under Section 11-AB of the Act, on delayed payment of duty for the relevant periods, saying that the plastic caps, which were put on the plastic tubes, were not included in the assessable value of the plastic tubes manufactured and cleared from the factory of the appellant.

(3.) Aggrieved, the appellant filed appeals before the Tribunal and by the impugned order, the Tribunal confirmed the demand of duty and modified the penalty and interest imposed by the Commissioner. The reason given by the Tribunal in the impugned order is that this Court in Union of India versus J.G. Glass Industries Ltd., 1998 97 ELT 5, had held that printing carried out on plain glass bottles in a different factory would not amount to "manufacture" under Section 2(f) of the Act, but, if manufacture of bottles and printing thereon are carried out within the same factory, then the ultimate product, which happensto be excisable item at the factory gate, is the printed bottle. Applying the decision of this Court in J.G. Glass Industries Ltd. (supra), the Tribunal took the view that where the plastic caps are fitted to the tubes before removal from the appellant's factory, duty is to be paid on the total value of the tubes including the value of the plastic caps.