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CX - Cutting and slitting of aluminium foils of jumbo size into smaller size is not taxable: CESTAT

By TIOL News Service

MUMBAI, MAR 20, 2017: THE appellant sare engaged in the activity of cutting and slitting of aluminum foils of jumbo size into smaller size. They are also engaged in some printing activity on the said foils as well.

A notice was issued to the appellant demanding CE duty on the activity of cutting, slitting and printing of rolls. The demands were confirmed and in appeal, the Tribunal remanded the matter for a decision in the light of the apex court decisions in LML Ltd. and Kores India Ltd . 2004-TIOL-92-SC-CX.

In de novo proceedings, again the demands were confirmed and thus the matter is before the CESTAT for the second time.

The appellant submitted that the issue of cutting and slitting of jumbo rolls of aluminum foil into smaller size has been examined by the Apex Court in SR Tissues Pvt. Ltd. 2005-TIOL-101-SC-CX and it has been held that the said activity does not amount to manufacture; in the case of GTC Industries Ltd. the Bombay High Court has held that the activity of embossing and cutting to shape the duty paid aluminium foil does not result in a distinct marketable commodity and is not an excisable activity. It is further stated that activity of printing was miniscule and within the exemption limit as can be seen from the annexure to the show-cause notice.

The AR submitted that in the case of Kores India Ltd - 2004-TIOL-92-SC-CX the Apex Court has held that cutting and spooling of typewriters/telex ribbons amounting to manufacture. Reliance is also placed on the decision in Sanjay Industrial Corporation & Others - 2015-TIOL-17-SC-CX.

The Bench while distinguishing the decisions cited by the AR observed that the facts involved in both the cases were different. However, the decision of the Apex Court in the case of SR Tissues Pvt. Ltd. (supra) squarely covers the instant case, the Bench added.

The CESTAT further noted - If the cutting and slitting of aluminium foil into roll is not taxable then the activity of printing done by the appellants falls within the SSI exemption limit.

The appeal was allowed.

(See 2017-TIOL-895-CESTAT-MUM)


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