TMI Blog1970 (8) TMI 31X X X X Extracts X X X X X X X X Extracts X X X X ..... ircles, there are two stages. At the first stage, billets are produced and, at the second stage, circles. In any case, it has to be held that the circles thus prepared are the result of this process of manufacture. The end-result of this process of manufacture is the production of circles in some form "which is envisaged as the goods to be subjected to excise duty. The excise duty was, therefore, correctly levied by the appellant. Appeal allowed. - 887 of 1968 - - - Dated:- 21-8-1970 - V. Bhargava and K. S. Hegde JJ. [Judgment per : Bhargava, JJ]. - 1. This appeal by certificate arises out of proceedings started by institution of a suit by the respondents, challenging the imposition of excise duty on circles of kansi and brass p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he rate/mentioned against Item 26A-(2) quoted above. The respondents claimed that the product, as it appeared in the form of uncut circles after rolling of billets by the rolling mills, could not be called circles in the sense in which this word is used in Item 26A-(2); and further, that the circles were prepared without undergoing any such changes as could be held to amount to manufacture, so that they at that stage were not liable to excise duty under this item. The trial Court decreed the suit, holding that these circles were not liable to excise duty; and that decree was upheld by the appellate Court and, in second appeal, by the High Court. It is this decision that has been challenged in this appeal by the Union of India, after obtaini ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd are not covered by that word as used in Item 26-A. No doubt, evidence has been given that, subsequently these uncut circles are trimmed and then converted into utensils. The argument of learned Counsel that only trimmed circles can be treated as circles and as finished product for purposes of Item 26-A cannot be accepted because that item itself envisages excise duty being levied on "circles in any form or size". We cannot understand how it can possibly be contended that uncut circles are not circles in any form or size. There is nothing in the item from which an inference can be drawn that the intention of the Legislature was to tax trimmed circles and not uncut circles. If there had been any such intention, the legislature would not ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e rolling mills were liable to excise duty. 5. In support of the decision given by the High Court to the contrary, learned Counsel for the respondents relied on two decisions of this Court in Union of India v. Delhi Cloth General Mills (1963) Supp. 1 SCR 586 = (AIR 1963 SC 791) and South Bihar Sugar Mills Ltd. v. Union of India (1968) 3 SCR 21 = (AIR 1968 SC 922). In our opinion, neither of these cases ' supports the contention raised on behalf of the respondents, and it appears that the ratio of these decisions has been misunderstood by the High Court and the lower courts. In the case of (1963) Supp. 1 SCR 586 = (AIR 1963 SC 791) (supra), the contention on behalf of the Union of India was that, in the course of manufacture of Vanaspati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refined oil to the consumers in the commercial community and can be described as refined oil only after deodorization. Since the process of deodorization is not carried out before that stage, no refined oil had come into existence and, consequently, the oil could not be taxed as such. That case has no applicability to the case before us where the tax is to be imposed on circles in any form. When the rolling mills have rolled the billets, what comes into existence are circles known as such, even though they are in uncut form. The product at that stage fully satisfied the description contained in Item 26-A (2). 6. Similarly, the decision in (1968) 3 SCR 21=(AIR 1968 SC 922) (supra) is of no help on this point, because, again, the gas, whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the legislature was aware that billets are converted into circles, and it was decided that excise duty should be leviable at both stages. When the legislature used the word "manufacture" in connection with circles, after having taken account of the fact that billets were already subjected to excise duty, it is obvious that the process, by which the billets were converted into circles, was held by the legislature to amount to manufacture. The word "manufacture" is defined in Sec. 2(f) of the Act as including any process incidental or ancillary to the completion of a manufactured product. The rolling of a billet into a circle is certainly a process in the course of completion of the manufactured product, viz. circles. In the present cas ..... X X X X Extracts X X X X X X X X Extracts X X X X
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