TMI Blog1985 (7) TMI 228X X X X Extracts X X X X X X X X Extracts X X X X ..... ification No. 119/75, while the excise authorities took the view subsequently that value of the raw material had also to be included, inasmuch as the appellants manufacture complete equipment for cylinders, out of the raw material received from the customers, and as such, they had erroneously been allowed benefit of aforesaid Notification. Thus, a short levy demand on account of duty, on full assessable value of the nuts and valves cleared by the appellants, and delivered back to the customers, was raised which the appellants resisted. The Assistant Collector rejected their pleas on the view that the terms of Notification were clear to the effect that only when an article is received from a customer and returned after some job work being carried out in respect thereto, that this Notification could apply, and not in cases where only the raw material such as brass rods or MS rods had been received, and complete identifiable parts, involving complete transformation into equipment for cylinders, had been manufactured. 3. On an appeal being carried to the Appellate Collector, he confirmed order of the Assistant Collector, inspite of appellants arguments, as put forward through their ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be placed on Notification No. 119 of 1975, dated 30th April, 1975 is to read it in the manner in which the Trade Notice issued by the Deputy Collector of Central Excise, Bombay reads it and as we read it above. To read it in the manner in which the Central Excise Authorities try to read it in Gujarat would be to render the Notification dated 30th April, 1975 totally otiose and redundant. If a new article does not emerge after the manufacturing process is completed, there is no occasion to levy excise duty. If a new article is to be subjected to the levy of full excise duty when granting exemption under Notification No. 119 of 1975, dated 30th April, 1975, the whole exemption would be totally meaningless. One cannot contemplate any possible occasion on which that particular Notification would apply. Under these circumstances, the stand taken up by the Excise Authorities in each of these matters with respect to the job work done by the respective petitioners cannot be upheld . 6. The appellants have also made reference to a judgment of Calcutta High Court in Madura Coats Limited [1980 E.L.T. 582 (Calcutta)]; and another judgment of Madras High Court : in Bapalal and Co. v. Governme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of the Tribunal s orders in case of Indian Steel Rolling Mills Ltd. (supra). 9. The appeal was accordingly taken up without further insistence on appellants attendance, in the presence of Shri S.C. Rohatgi, Departmental Representative, who had also filed written submissions in reply to the arguments forwarded by the appellants. Shri Rohatgi both in his arguments before us as well as written submissions, placed reliance on a Larger Bench judgment of this Tribunal in the case of National Organic and Chemicals Industries Limited v. Collector of Central Excise, Bombay, reported in 1985(21) E.L.T. 252 (Tribunal)=1985 (5) E.T.R. page 504, laying emphasis on the fact that in appellants case, the physical character of the raw material received, was completely changed. He urged quoting from the judgment in NOCIL case that there was manufacture in the primary sense inasmuch as the original article lost its identity ; the resultant product being completely distinct from the material received, and thus benefit of the Notification could not be claimed by the appellants. The learned DR further contended that it was obvious from the written submissions and the samples sent by the appellants ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acturing process on recovery of only labour charges ; the benefit of Notification would be available. 11. The Calcutta High Court in the case of Madwa Coats Limited ; firstly, in a Single Bench (1980 E.L.T. 582) and then in the Division Bench (1982 E.L.T. 129) where the party was receiving nylon or rayon yarn from customers and were returning to them after conversion into warp sheets, after charging only for job work, allowed benefit of this Notification No. 119/75. It is noteworthy that this matter was taken up by Union of India to the Supreme Court by filing a special leave petition to appeal, against the Division Bench judgment of Calcutta High Court, but the leave petition was dismissed by the Supreme Court, thus endorsing the view that in such cases assessment had to be done on job work value only. We have also looked up other judgments, relied upon by the appellants, such as in the case of Bapalal Company decided by Madras High Court (1981 E.L.T. 587), where crude diamonds were being supplied, and returned afterwards in the shape of diamond jewellery after cutting and setting the diamonds in gold. There also, it was held that since the appellants received only labour char ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding was not true ; namely that they were receiving brass rods or MS rods from their customers, and returning them to the same customers after charging for labour only, for the manufacturing process carried out in respect thereto. The only ground for denying benefit of the Notification to the appellants is that what they were receiving could not be considered as article but was only in the nature of raw material , which was fully transformed in the process of manufacture, resulting in different articles with distinct trade name and identity. This assumption of the Excise authorities, in view of various judgments of the High Courts quoted above is manifestly erroneous inasmuch as, as pointed out by different High Courts, manufacturing process does entail transformation in the nature of article or material, and pertinently pointed out by Gujarat High Court in Anup Engineering case, that if the interpretation given by the Excise authorities were to be adopted then there will be no conceivable situation when this notification could be applied. The Tribunal in Larger Bench judgment in the NOCIL s case did no doubt held that there was to be distinction between manufacture in the prima ..... X X X X Extracts X X X X X X X X Extracts X X X X
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