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2021 (10) TMI 1029 - MADRAS HIGH COURTActivity amounting to manufacture or not - fixing of a lens in a spectacle frame - Remission of Excise Duty - activity of fixing of prescription lenses in spectacle frames - HELD THAT:- A perusal of the show cause notice reveals that the activity carried out in the show rooms was the manufacture and clearance of spectacles carrying 'Titan Eye+’ Brand. Though adverse inferences are sought to be drawn by the respondents on other grounds as well, such as violation of conditions contained in Notification 8/2003-CE dated 01.03.2003, this point has not been argued and both the parties before me have confined the scope of the arguments to (i) whether the respondents were right in law in having issued the impugned show cause notices inspite of binding judicial precedents to the opposite effect and (ii) whether the assembly of prescription lenses on to a spectacle frames is an activity that amounts to ‘manufacture’ attracting levy of duty under the Act. The petitioners would specifically confirm that manufacture of the power lens i.e., the conversion of lens blanks into prescription lens is a taxable activity and that such activity takes place in the workplace/factory. They also confirm that the frames used are either imported or manufactured indigenously in a factory, subject to central excise duty. These two activities i.e. manufacture of the spectacle frames and prescription lenses are, admittedly excisable events and the petitioners are liable to remit duty in regard to the aforesaid two events, where applicable. The petitioners also engage in sale of ready-made eye-wear that is purchased by customers, off-the-shelf. Post manufacture of the spectacle frames and lenses, the goods are sent separately to the petitioners’ show rooms and what is undertaken in the show room is only an assembly of the prescription lenses and the spectacle frames wherein the lenses are merely mounted upon the frames, to result in a spectacle - The process of assembly is bound to involve some amount of refining and fine-tuning of the individual components and this, by itself, will not tantamount to manufacture. In fact, most establishments engaged in selling eye-wear provide a gamut of services in this area including, having an optician in their employ or on call, and infrastructure for the testing of vision. Thus, notwithstanding that a distinct commercial product is obtained upon assembly of a lens with a spectacle frame, this would not result in such assembly being equated to manufacture. The judgments in the cases of BHOLANATH SREEMANY VERSUS ADDITIONAL COMMISSIONER OF COMMERCIAL TAXES AND OTHERS [1978 (7) TMI 225 - CALCUTTA HIGH COURT] and M/S AMAZON SELLER SERVICES PRIVATE LIMITED, BANGALORE VERSUS THE COMMISSIONER OF CENTRAL EXCISE, THANE-I [2016 (3) TMI 69 - AUTHORITY FOR ADVANCE RULINGS] decide and reiterate the issue of whether the activity of assembly simpliciter including fitting and minor adjustments that are part and parcel of the process of assembly, constitute ‘manufacture’ for the purposes of the Act, in favour of the assessee. The show cause notices, to this extent, and insofar as they purport to equate the process of assembly to manufacture, are quashed. Petition allowed.
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