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2017 (5) TMI 183 - HC - Central ExciseManufacture - Whether the process to which old tyres are subject to produce two or more pieces of cut tyre is ‘manufacture’ within the meaning of Section 2 (f) of the Central Excise Act, 1944? - Held that: - Even where an entire unit is set up for the purposes of converting old and used tyres into pieces of cut tyres, the essential character remains the same. Used tyres and tubes remain as such even after they are cut into pieces. They do not undergo any transformation so as to amount to 'manufacture' within the meaning of Section 2 (f) of the CE Act - the mere classification of old and used tyres under Tariff Entry No. 4012 or Tariff Item No. 4004 with the rate of duty at 12.5% would not mean that the process by which the scrap rubber was obtained from old tyres amounted to manufacture. With the first limb of the 'two-fold' test, i.e. 'manufacture', not being satisfied, the question of examining whether they become excisable as a result of their marketability does not arise - The process to which old tyres are subject to produce two or more pieces of cut tyre is not ‘manufacture’ within the meaning of Section 2 (f) of the CE Act. Whether the decision of this Court in Modi Rubber Limited v. Union of India [1986 (12) TMI 41 - HIGH COURT OF DELHI AT NEW DELHI] requires to be reconsidered? - Held that: - There can be no manner of doubt that by referring to the decision of Modi Rubber Limited v. Union of India and thereafter coming to the conclusion that cinder was not 'manufactured', the Supreme Court in Union of India v. Ahmedabad Electricity Co. Limited [2003 (10) TMI 47 - SUPREME COURT OF INDIA] impliedly approved the decision of this Court in Modi Rubber Limited v. Union of India, where it was held that Excise duty is an incidence of manufacture and, therefore, it is essential that the product sought to be subjected to excise duty should have gone though the process of manufacture. Cinder cannot be said to have gone through any process of manufacture, therefore, it cannot be subjected to levy of excise duty. - The decision of this Court in Modi Rubber Limited v. Union of India does not require to be reconsidered. Petition allowed - decided in favor of petitioner.
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