The CESTAT Mumbai has held that strapping together of tyres, tubes and flaps, referred as 'TTF', at the premises of logistics service provider, for dispatch to dealers for catering to replacement market for bus/lorry operators, is not 'manufacture' under Section 2(f)(iii) of the Central Excise Act, 1944.
The adjudicating authority had in this case concluded that strapping at three places, affixing of hologram (after inspection and quality ascertainment) and offer of warranty, amounted to 'treatment' in the definition of 'manufacture' in Section 2(f).
Allowing the appeal, the Tribunal observed that price of aggregate was the sum of price of the three disaggregated products.
Submission that inspection done at logistics service provider's premises fell within Section 2(f)(iii), was also found not tenable, as it implied that the same was lacking at prior stage.
Further, observing that Section 2(f)(iii) used the expression 'marketable' and not 'more marketable', the Tribunal in Michelin India Pvt. Ltd. v. Additional Director General rejected the Department's plea of hologram affixing. According to the Tribunal, this proposition also presupposes lack of marketability in the absence of hologram.
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