2026-VIL-300-CESTAT-KOL-CE
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CENTRAL EXCISE CESTAT Cases

Central Excise - Manufacture - The appellant, a small-scale unit listed in DGS&D rate contract, manufactured and supplied 'Folding Cot' to Indian para-military forces. The revenue authorities raised a demand for central excise duty on the ground that the fabrication of the Folding Cot amounted to 'manufacture' under Section 2(f) of the Central Excise Act, 1944 - Whether the fabrication of Folding Cot by the appellant would amount to 'manufacture' – HELD - The process of cutting, bending, and welding of MS black pipes by the appellant to fabricate the Folding Cot resulted in a distinct and marketable product, and therefore, the activity would amount to 'manufacture' under Section 2(f) of the CEA - The folding cots are manufactured products in terms of Section 2(f) of the CEA 1944 and the duty liability worked out is required to be paid along with interest - The appellant had a bonafide belief that the fabrication of Folding Cot was not excisable, and they had neither charged nor remitted the excise duty. Considering these facts and that the major portion of the demand was set aside, the penalty imposed on both the appellant firm and its partner are set aside – The appeal is partly allowed - Value addition - The revenue authorities included the value of the 'Plywood Top' procured by the appellant and supplied along with the Folding Cot in determining the assessable value - Whether the value of the Plywood Top can be included in the assessable value of the Folding Cot – HELD - The Plywood Top was a trading item procured by the appellant from the open market and supplied as per the requirement of the buyers. The value of the bought-out items like Plywood Top cannot be included in the assessable value of the manufactured goods (Folding Cot). The demand on this count is set aside.
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