TMI Blog1999 (6) TMI 195X X X X Extracts X X X X X X X X Extracts X X X X ..... on of duty paid used transformer oil on their own account out of used transformer oil purchased from the market and also on job work basis out of used transformer oil received from U.P. State Electricity Board (UPSEB). The Commissioner, Central Excise, Kanpur, under the impugned order dated 24-12-1996, confirmed the demand of Central Excise duty amounting to Rs. 5,30,246.10 on the reclaimed transformer oil cleared during the period from 24-3-1996 to 30-6-1996 after classifying the reclaimed transformer oil under sub-heading 2710.90 of the Schedule to the Central Excise Tariff Act, holding that manufacture is a process of converting some material into a form adopted for uses to which in its original form it could not be so used; that the app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uring activity had been undertaken by the appellants; that the Principal Collector, Central Excise, Kanpur in letter dated 15-11-1994, addressed to UPSEB opined that reclamation of used transformer oil through the process undertaken for its purpose would not amount to manufacture within the provisions of Section 2(f) of the Central Excise Act. The learned Advocate contended that the Commissioner was duty bound to abide by and follow the order of the Principal Collector; that further the impugned order had been passed in disregard and defiance of the judicial pronouncements. He relied upon the decision in the case of C.C.E. v. Crescent Chemical Corporation, 1990 (48) E.L.T. 458 (T) wherein it was helds that It is the production or manufactu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ersion of castor oil (commercial) to castor oil (BP) by a process of filteration was held to be not amounting to manufacture as no new product emerged. The reliance was also placed on the following two decisions :- (i) C.C.E., Coimbatore v. Brooke Bond India Ltd., 1998 (101) E.L.T. 296 (T) Re-processing of instant clotted coffee does not result in process of manufacture. (ii) C.C.E. v. Maize Products, 1994 (73) E.L.T. 390 (T) (iii) C.C.E., Bombay v. S.K. Kabbur (P) Ltd., 1998 (101) E.L.T. 516 (T) (iv) C.C.E., Bombay v. Plastipeel Chemicals Plastic P. Ltd., 1998 (99) E.L.T. 639 (T) As no new commodity came into existence as a result of the addition of anti-oxidant and rust inhibitors to MoS2, which was already in the nature o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 241 (S.C.) in which it was held that drilling, trimming and chamfiring of brake lining blanks amount to manufacture as without such process brake lining blanks cannot be used by owners of motor vehicles. It was further held that when adopting a particular process, if a transformation takes place which makes the product have a character and use of its own, which it did not bear earlier, then the process would amount to manufacture within the meaning of Section 2(f) irrespective of the fact whether there has been a single process or have been several processes. He also referred to the decision in the case of Hawkins Cookers Ltd. v. C.C.E., Chandigarh, 1997 (96) E.L.T. 507 (S.C.). Finally he relied upon the decision in Honeyrex Products (P) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... change of an article is the result of treatment, labour and manipulation. But something more is necessary and there must be transformation; a new and different article must emerge having a distinctive name, character or use. This judgment has been followed in numerous cases. The true test for determining whether manufacture can be said to have taken place is whether the commodity which is subjected to the process of manufacture can no longer be regarded as the original commodity but is recognised in trade as a new and distinct commodity. In the present case, the appellants bring used transformer oil and by removing impurities, it is made again usuable as transformer oil. Both before and after the processing, the product is only transform ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ck and not the transformer oil itself. The Tribunal, after referring to the definition of transformer oil and base stock as given in Indian Standard Glossary of Petroleum, observed the Transformer Oil Base Stock is primary material introduced into a plant for processing. In other decisions relied upon by the learned SDR on behalf of the Revenue, the process was held to be amounting to manufacture as a new distinct commodity has emerged on account of process undertaken in those cases. For instance in Honeyrex Products (P) Ltd. case, supra, the Tribunal held that Honeyrex is a new commodity as it was not marketed as natural honey and because of addition of ingredients like sucrose, glucose and preservatives a new product different from natura ..... X X X X Extracts X X X X X X X X Extracts X X X X
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