DALMIA INDUSTRIES LTD Vs. COMMISSIONER OF C. EX.

JUDGEMENT

(1.) IN both these appeals, common question of law and facts are involved, hence they are taken up together for disposal as per law.

(2.) APPEAL No. E/2148/94 -C arises from Order -in -Appeal dated 22 -9 -1994 passed by the Collector of Central Excise (Appeals), New Delhi. By this order, he has confirmed the order of the Assistant Collector of Central Excise, Alwar, who has confirmed the classification of product "Milk Care Designer Feeder" in various sizes under sub -heading 3924.90 of Central Excise Tariff Act, 1985. However, he has granted the benefit of Notification No. 14/92 -C.E., dated 1 -3 -1992 as amended, subject to the condition that inputs used in the product should be duty paid. As a consequence, he finalised the classification list with effect from 22 -10 -1993 bearing Div. S.No. 87/93 as the same was previously approved provisionally under Rule 9B of Central Excise Rules, 1944. The issue before the authorities in these appeals was as to whether putting together different articles of feeding bottles in a single pack amounted to the process of manufacture, as per the definition of the term manufacture given in Section 2(f) of Central Excises and Salt Act, 1944 and as to whether they are entitled for benefit of the said Notification? It was contended by the asses -see before the authorities that they were only doing packing activities of the product and their process did not amount to manufacture. It was stated by them that they are buying bottles from 'W, feeder nipples from 'X', bottles lids from 'Y' and little plastic part is from 'X' manufacturers and then they assembled all these parts in their unit by putting all of them in a combine pack and sell the product in the brand name of "Milk Care Designer Feeder", a prime product of the appellants. The Assistant Collector held that individually these articles can be called feeding bottle as claimed by them. It is only when a calibrated bottle is put alongwith nipple and flow regulator that the feeding bottle comes into existence. He has not accepted the citation of the Bombay High Court relied in the case of Commissioner of Sale Tax v. Trinity Product as reported in 1975 (35) S.T.C. 502, wherein it has been held that such activity does not amount to manufacture as defined in Section 2(17) of the Bombay Sales Tax Act, 1959. On this aspect, the Assistant Collector took a view that the said judgment is irrelevant for coming to the conclusion as to whether the activities undertaken by the assessee amounted to manufacture or not; as the definition of manufacture under the said Act was different from the one under Excise Act. As regards the classification, he has held that the product being plastic household articles are classifiable under Heading No. 3901 to 3915 of Central Excise Tariff Act, 1985 except rubber nipple whenever used (in other case silicon nipple is used which is classifiable under one of the headings of 3901 to 3915 of Central Excise Tariff Act, 1985). He has held that even in case feeding bottle where rubber nipple is used benefit of the said Notification can be given because the plastic articles are predominantly present by weight and/or value in the product. He has taken a view that the product would attract nil rate of duty as prescribed under the said Notification provided the duty has been paid on the inputs used in its manufacture and no Modvat credit under Rule 57A had been availed.

(3.) THE learned Collector has confirmed the findings and has also distinguished the judgment cited by the appellants including the citation of British Physical Laboratory India Ltd. v. Collector of Customs as reported in 1990 (50) E.L.T. 567, on the ground that the same is not applicable as claimed by the appellants. The learned Collector has held that the appellants carried out the process of sterilization before packing, therefore, such a process would result in the process of manufacture.