COMMISSIONER OF CENTRAL EXCISE Vs. SRINIVASA INDUSTRIES

JUDGEMENT

(1.) THIS is an appeal filed by the Revenue. The respondents have requested for adjournment of hearing, saying that they have not received notice as required under Section 35B(4) of the Central Excise Act and that, without knowing the grounds of the appeal, they are not in a position to defend themselves. Their application, however, acknowledges receipt of notice for today's hearing. A perusal of the record shows that a copy of the memorandum of appeal had been issued to the respondents under cover of notice dated 12 -7 -2004 sent by the Assistant Registrar. That notice had expressly required to noticee to treat it as a notice under Section 35B of the Central Excise Act. The subsequent notice dated 25 -4 -2005 issued by the Assistant Registrar informed the respondents that the appeal had been fixed for hearing on 5 -5 -2005. The respondents received both the notices. Their grievance that no notice as required under Section 35B(4) was issued to them is bereft of merit inasmuch as, going by the facts stated above, the requirement of Section 35B was fulfilled by the Registry. It is also pertinent to note that the respondents are not entitled to file any cross -objection in terms of Sub -Section (4), in this case, as they are not in any way aggrieved by the order of the Commissioner (Appeals) challenged by the Revenue. The impugned order is totally in favour of the respondents and therefore Sub -Section (4) of Section 35B is not meant to be invoked by them. The application filed by the respondents for adjournment of hearing is frivolous and hence rejected. Nevertheless, having regard to the nature of the issue raised by the Revenue in this appeal, I am of the view that this appeal need not be kept pending. Hence the appeal is being taken up for disposal.

(2.) IT appears from the records that the respondents are engaged in the manufacture of "Stannous Chloride" [Heading 28.27 of the CETA Schedule]; that they had dispatched certain quantity of the said goods in polythene bags and again packed in old/used corrugated paperboard, to their customer. The goods were rejected and returned by the buyer, whereupon the respondents filed D -3 Declaration with the department under Rule 173H of the Central Excise Rules, 1944, and repacked the goods contained in polythene bags, in fresh cardboard containers labelled "Stannous Chloride" and cleared the same without payment of duty, to third parties. The department treated this activity as amounting to 'manufacture' in terms of Note 10 to Chapter 28 of the CETA Schedule and demanded duty from the respondents. This demand was confirmed by the original authority but set aside by the first appellate authority. Hence the present appeal of the Revenue.

(3.) THE short question is whether Chapter Note 10 is applicable to the activity undertaken by the respondents. This Chapter Note reads as under: