KUWER INDUSTRIES LTD. AND SHRI Vs. CCE

JUDGEMENT

(1.) IN these four appeals, filed by M/s. Kuwer Industries Ltd. and Ors., the issue relates to the clearance of metallised polyester film without payment of duty.

(2.) SHRI Rajiv Dutta, learned Advocate, submitted at the outset, that the impugned Order has been passed by the Commissioner confirming demand of Central Excise duty and imposing penalties on all the appellants on the ground that they had cleared metallised polyester film manufactured out of polyester film purchased by them in the names of other firms; that it has been held by the Supreme Court in the case of Metlex (I) Pvt. Ltd. v. C.C.E., New Delhi, 2004 (165) ELT 129 (SC) that laminating/metallising of duty paid film does not amount to manufacture. The learned Advocate contended that once the process undertaken by them i.e. of metallising of polyester film does not amount to manufacture, the question of payment of any Central Excise duty on metallised film, does not arise. We also heard Shri U. Raja Ram, learned D.R.

(3.) IN the case of M/s. Metlex (I) Pvt. Ltd. (supra), the appellants were purchasing duty paid film. They were merely laminating or metallising it and in that case the Supreme Court has held that "the product is a film to start with and remains the film after process of lamination or metallisation. Thus, there is no new distinct product which has come into existence and it would have to be concluded that there is no manufacture". Thus, the Supreme Court has held that no process of manufacture has taken place when the appellants in that case carried out the process of lamination/metallisation. In the present matters, the Central Excise duty has been confirmed and penalties have been imposed on all the appellants as they had undertaken the process of metallisation on the polyester film purchased by them in the names of other persons. As the process of metallisation on polyester film has been held to be not amounting to manufacture, there is no question of discharging any duty liability by the appellant company. Accordingly, without going into any other aspect, we set aside the impugned order and allow all the appeals.