TMI Blog1998 (2) TMI 137X X X X Extracts X X X X X X X X Extracts X X X X ..... tioner lays underground telephone cables. These cables are made up of several pairs of wires which are all enclosed in a single sheath. There is limitation both in terms of manufacture and ability of handling cables of unlimited lengths suitable for every certain distance. Therefore, it is necessary to lay several cables of different lengths and connect the cables. The object of such connection is to ensure continuity of the individual pairs of wires to provide protective covering to the cable joint to fill inert material inside the cable joint. Ultimately a joint emerges by joining of cables which is a part of cable itself. There are various items which are required for the purposes of joining two cables. They are as follows : 1.Heat Shrink Sleeves, 2.Aluminium Canisters 3.Branch off clips 4.Cleaning Tissue Pouch 5.SS Channels 6.Sealant Tapes, 7.P.V.C. Tapes, 8.Black Polyester Tape 9.Cleaning liquid 10.Splice filling Compound 11.Earth continuing Wire 12.Sheath Connector, 13.Adhesive Aluminium foil 14.PE Sheet 15. Wire Connectors etc.For the purpose of convenience the Department of Telecommunications purchases what is known as "Cable Jointing Ki ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the said circular, the respondents have declared that the activity involved in cable jointing kit is manufacture and therefore, cable jointing kits are liable for excise duty. Aggrieved by the same the present writ petition is filed. 4.W.P. No. 22078/97 is filed by Surana Telecom Ltd., Hyderabad. The petitioner is a company incorporated under the provisions of the Indian Companies Act. The averments made in the affidavit filed in support of the writ petition are more or less similar to the averments made in W.P. No. 8818/97. The petitioner also sells cable jointing kits. 5.W.P. No. 24242/97 is filed by M/s. Newtech Stewing Telecom Ltd., Hyderabad. The petitioner is a company incorporated under the provisions of the Indian Companies Act having its registered offices at Secunderabad. The averments made in this affidavit filed in support of the writ petition are more or less similar to the averments made in the W.P. No. 8818/97. The petitioner also sells cable jointing kits. 6.In the counter affidavit filed by the respondents, it is stated that the said circular was issued by the Board constituted under Section 3 of the Central Board of Revenue Act, 1963. Under Section 37B(b) o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in one kit does not amount to manufacture as no process is involved. When once the activity does not amount to manufacture within the meaning of Section 2(f) no excise duty is leviable and therefore, the circular issued treating activity as manufacture is without authority of law. When once the circular issued is without authority of law the fact that the petitioner preferred an appeal before the Appellate Authority against the order of assessment is not a bar for exercising the jurisdiction under Article 226 of the Constitution of India. The Counsel relied on the following judgment in support of his contention. (1)Union of India v. Delhi Cloth and General Mills - 1977 (1) E.L.T. (J 199) (S.C.) = AIR 1963 S.C. 791 (2)S.B. Sugar Mills v. Union of India -1978 (2) E.L.T. (J 336) (S.C.) = AIR 1968 S.C. 922 (3)Ujagar Prints v. Union of India - 1988 (38) E.L.T. 535 (S.C.) = 1989 (3) SCC 488 (4)Porritts Spencer (Asia) Ltd. v. Collector of Central Excise, New Delhi - 1995 (Suppl.) SCC 219 (5)Moti Laminates Pvt. Ltd. v. Collector of Central Excise, Ahmedabad - 1995 (76) E.L.T. 241 (S.C.) = 1995 (3) SCC 23 8.While the Counsel for the respondents contended that since the Circul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aracter or use." In South Bihar Sugar Mills Ltd. v. Union of India (supra) the Supreme Court followed the decision in D.C.M.'s Ltd. and observed that : "The Act charges duty on manufacture of goods. The word "manufacture" implies a change but every change in the raw material is not manufacture. There must be such a transformation that a new and different article must emerge having a distinctive name, character or use." In Ujagar Prints v. Union of India (supra) the Supreme Court reiterated the view expressed in D.C.M.'s case and observed that : "The prevalent and generally accepted test to ascertain that there is `manufacture' is whether the change or the series of changes brought about by the application of processes take the commodity to the point where, commercially, it can no longer be regarded as the original commodity but is, instead, recognised as a distinct and new article that has emerged as a result of the processes. There might be borderline cases where either conclusion with equal justification be reached. Insistence on any sharp or intrinsic distinction between `processing' and `manufacture', results in an oversimplication of both and tends to blur their interd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngredients referred to above, the provisions of the Act are not attracted and no excise duty is leviable. Even if the goods so produced were excisable goods mentioned in the schedule, they cannot be subjected to duty unless they are marketed or capable of being marketed. The marketability is one of the principle test in determining the liability to excise duty. In addition the product which is brought into existence must have a distinct identity in the commercial world. 13.Let us apply the above tests to the facts of the present case. As pointed out in the earlier paragraph, the identity of the items placed in the kit is not changed. They are known in the market as such. There is no transformation in the articles which are placed in the kit. They are marketable as such. Further, no process is also involved except that all the articles are put together in one box. It is true that by placing all these articles in one kit the kit has a distinct name known as `cable jointing kit'. However, there is no change in character and use of the articles placed in the kit. In other words, except the test that the articles which are placed in the kit has a distinct name, the other tests have n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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