Facts of the Case
Assessee was buying conveyor belting in endless length and cutting same into required sizes
Issue :
Department argued that said process amounted to manufacture and demanded duty – Tribunal held that conveyor belting is material used in construction of conveyors and like fabrics and other materials, belting comes in endless length and activity of cutting etc. cannot be considered as amounting to manufacture
HELD :
Mere cutting of lengthy conveyor belt into smaller sizes would not amount to manufacture, ipso facto, unless it is shown that as a result of said cutting, it was transformed into a new product which was a marketable product . Since revenue has failed to bring out these aspects, Tribunal order was confirmed
SUPREME COURT OF INDIA
Commissioner of Central Excise, Chennai-II
v.
Tejo Engineering Services (P.) Ltd.
CIVIL APPEAL NOS. 327-332 OF 2006
JULY 29, 2015
K. Radhakrishnan, Sr. Adv., P.K. Mullick, Arijit Prasad, T.M. Singh and B. Krishna Prasad, Advs. for the Appellant.V.N. Raghupathy, Adv. for the Respondent.
ORDER
1. Though in these appeals, various issues are raised, we feel that the only issue which needs consideration relates to cutting of the conveyor belting into required sizes and the issue is as to whether it involves manufacture or not. The Customs, Excise and Service Tax Appellate Tribunal (hereinafter referred to as ‘CESTAT’) in its impugned order has dealt with this issue in the following manner: —
“Another point raised in the Revenue’s appeal is that the appellant buys the conveyor belting in endless length and cuts them to required size and that involves manufacture. This contention of the Revenue is not correct. The conveyor belting is the material used in the construction of conveyors. Like fabrics and other materials, belting comes in endless length and the activity cutting etc. carried out by the appellant cannot be considered as amounting to manufacture. So, no duty is attracted.”
2. After hearing the learned counsel for the parties, we are of the opinion that the aforesaid decision of the CESTAT does not call for any interference. Mere cutting of the lengthy conveyor belt into smaller sizes would not amount to manufacture, ipso facto, unless it is shown that as a result of the said cutting, it was transferred into a new product which was a marketable product. Revenue has failed to bring out these aspects. We, therefore, are of the opinion that the matter is squarely covered by the judgment of this Court in ‘Servo-Med Industries (P.) Ltd. v. CCE [2015] 57 taxmann.com 314/51 GST 12.
3. The appeals are, accordingly, dismissed.