Duty demand unsustainable as activity of fitting power lens into frames doesn’t amount to manufacture

Medical Research Foundation Vs Commissioner of GST & Central Excise (CESTAT Chennai)

CESTAT Chennai held that the activity of fitting the power lens into the frames is merely results in assembly and hence the same doesn’t amount to manufacture. Accordingly, duty demand unsustainable in law.

Facts- The appellant according to department are manaufacurers of spectacles falling under chapter heading 9004 of Central Excise Tariff Act, 1985. Based on the intelligence gathered that the appellant is engaged in manufacturing spectacles and are clearing them without payment of Central Excise Duty, the officers of Preventive Unit visited the premises of the appellant.

Department contended that the activities undertaken by the appellant amounts to manufacture of spectacles as provided in section 2 (f) of Central Excise Act, 1944 which attracts Central Excise duty at 2% (without CENVAT Credit) vide Notification No.16/2012-CE dated 17.03.2012 and at 6% (with CENVAT Credit) vide Notification No.19/2012–CE dated 17.03.2012.

Show Cause Notice was issued to the appellants proposing to demand duty for the spectacles cleared by them alongwith various penalties. The original authority confirmed the duty demand.

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