MAC VENETIANS Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) THE appellants - M/s. Mac Venetians, are manufacturers of 'Venetian blinds' and 'Vertical blinds'. The dispute relates to payment of central excise duty on vertical blinds manufactured and cleared during the years 1989 -90,1990 -91,1991 -92 and 1992 -93. The goods had originally been cleared without payment of duty as exempted under Notification No. 65/87 dated 1 -3 -1987 as made without the aid of power. After investigations, show cause notice dated 13 -12 -1994 was issued holding that the goods were actually manufactured with the aid of power and therefore, this notice invoked the extended period as contemplated in proviso to Section 11A of the Act on the allegation that the manufacturers had wilfully suppressed facts with intent to evade payment of duty on the goods manufactured by them. The adjudication Order No. 7/98, dated 23 -7 -1998 impugned in this appeal was passed by the Commissioner of Central Excise, Delhi -I confirming duty demand of Rs. 26,63,825 / -. The order also imposed a penalty of Rs. 3 lakhs on the manufacturer.

(2.) THE appeal has challenged the order on the ground that the process of assembling vertical blinds is not a manufacturing activity leviable to central excise duty, even if the activity was assumed to be manufacture, the appellants were eligible for the exemption, the demand was time -barred and that the demand amount has been worked out incorrectly.

(3.) WITH regard to appellants' submission that there was no manufacture of excisable goods, the contention is that for bringing into existence vertical blinds, the activities carried out are only one of cutting aluminium channels and making holes in them, cutting of fabrics into strips and stitching the ends and fitting nylon cord and other items and these did not amount to manufacture. The appellants have also submitted that the exemption notification was in respect of "goods made without the aid of power". It has been contended that the word 'made' cannot be treated as equivalent of manufacture as has been done by the central excise authorities. During hearing, the learned counsel for the appellants submitted that the use of the word 'made' in the notification implies that all the processes in the making of the goods should be carried out without the aid of power. He submitted that the difference in the intention would be clear when the usage of the word 'made' in this notification is contrasted with other Notifications like Notification 167/86 which uses the expression 'no process in or in relation to manufacture of the said goods'. The learned counsel submitted that when the intention was that exemption should be applicable only to producing entirely without the use of power, care was taken to use words like 'no process' is carried out with the aid of power. In the other cases, even if power was used for carrying out some of the processes, it would still be a situation of making without the aid of power. In the instant case, as only very few of the processes like cutting and stitching are alleged to be carried out with the aid of power, and remaining processes are admittedly carried out without the aid of power, this case would be still one where goods are made without the aid of power. The learned counsel also contended that the demand is on account of a misunderstanding that words 'manufacture' and 'made' meant the same and are interchangeable.