1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION CENTRAL EXCISE APPEAL NO.138/2006 The Commissioner of Central Excise, Mumbai-V, 5th Floor,Utpad Shulk Bhavan, Plot no.C-24, Sector-E, Bandra-Kurla Complex, Bandra (E), Mumbai-400 051 Appellant Vs. M/s GTC Industries Ltd., Tobacco House, Vile Parle, Mumbai-400 056 Respondent Mr.A.S.Rao a/w Mr.S.D.Bhosale for applellant Mr.V.Sridharan a/w Mr.Prakash Shah i/b P.D.S.Legal for respondent CORAM-J.P.DEVADHAR AND MRS.MRIDULA BHATKAR ,JJ RESERVED ON - 13TH JANUARY,2011. PRONOUNCED ON J U D G M E N T (Per Mrs.Mridula Bhatkar,J.) . This appeal was admitted on the following questions of law. 2 1 Whether the CESTAT was justified in holding that cut and embossed foil which comes into existence during the course of manufacture of cigarette is not dutiable ? 2 Whether on the facts and circumstances of the present case the CESTAT was justified in directing the original authority to grant the refund claim of the Assessee in accordance with the provision of section 11 B ? 2 This appeal is filed by the Commissioner of Central Excise, Mumbai-V challenging the order dated 24/8/2005 passed by the CESTAT . The respondent-assessee had filed a refund claim on 12/9/1994 seeking refund of Rs.1,13,006.50 being the amount paid as duty during the period from 29/4/1994 to 31/5/1994. The refund claim was adjudicated by the Assistant Commissioner of Central Excise ,Mumbai-II ,Division-6 vide order dated 23/8/1995 . By the said order, the refund claim was rejected on the ground that the activity of embossing and cutting to shape the duty paid aluminium foil constituted manufacture 3 and therefore duty paid on such activity cannot be refunded. Being aggrieved by the said order in original, the assessee preferred an appeal before the Commissioner (Appeals) Central Excise ,Mumbai V who by order dated 3/8/1999 allowed the appeal of the assessee , by holding that no marketable commodity came into existence onaccount of embossing / cutting to shape the aluminium foil purchased by the assessee and consequently duty paid on such activity is liable to be refunded. Thereafter the Revenue challenged the said order of the Commissioner (Appeals) before the CESTAT and the CESTAT by its order dated 24/8/2005 dismissed the appeal of the Revenue and maintained the order passed by the Commissioner (Appeals) Central Excise and directed the original authority to deal with the refund in accordance with the provisions of section 11(B) of the Central Excise Act,1944. Being aggrieved by the said order of the CESTAT the Revenue has filed this appeal under section 35(G) of the Act. 3 Learned counsel Mr.Rao appearing for the appellant made 4 two fold submissions. He argued that the process of embossing itself is manufacturing and the product that emerges on embossing is a new product. Secondly aluminium foil brought in bulk by the assessee on payment of excise duty is also subjected to the process of cutting it into small pieces which changes the form and nature of the foil and hence the said process amounts to manufacturing. Accordingly counsel for the revenue submitted that the order passed by the CESTAT is liable to be set aside. 4 In a companion appeal being C.E.Appeal No. 139/2006 (Commissioner of Central Excise Vs.GTC Industries Ltd.) decided by us today, we have held that when dutypaid aluminium foil is subjected to the process of embossing/cutting to shape , the resultant product does not emerge as a distinct marketable commodity and hence no excise duty is leviable on such product . Accordingly, we hold that the Tribunal was justified in holding that the assessee was not liable to pay duty on cut and embossed aluminium foil. 5 5 As regards the question of allowing refund subject to the provisions of Section 11 B of the Central Excise Act, the revenue cannot have any grievance in respect thereof. Once it is held that the assessee is entitled to refund then, such refund can be allowed only subject to the provisions of Section 11 B of the Central Excise Act,1944. 6 In the result, both the questions are answered in the affirmative that is, in favour of the assessee and against the revenue. 7 The appeal is disposed of accordingly with no order as to costs. (MRS.MRIDULA BHATKAR,J.) (J.P.DEVADHAR,J.)