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TMI Blog1972 (2) TMI 89X X X X Extracts X X X X X X X X Extracts X X X X ..... and tubes". The companies challenged this levy by instituting separate writ petitions in this court. 3. In the writ petition filed by the Union Carbide India Ltd., three points were posed :- (1) The aluminium cans are not "goods" within the meaning of the Act and so no excise duty is leviable on them. (2) Entry 27 is confined to manufactured goods. No manufacturing process is involved in making the aluminium cans. (3) Under entry 27(e) duty is payable ad valorem since the aluminium cans are incapable of valuation, no duty can be levied. 4. Hon. G.C. Mathur, J. held that the process of making the aluminium cans or torch bodies amounts to manufacture. These cans were an intermediate product in the process of manufacture of torches. They were not known in the trade and were not marketable. They were not goods contemplated by the Act. The learned Judge did not go into the third question relating to valuation. On these findings, a writ of mandamus was issued restraining the excise authorities from levying and collecting excise duty on the torch bodies. They were directed to refund or adjust excise duty already collected on this product. 5. Soon after this decision, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rusion process but by a totally different process called impact extrusion process. 9. The impact extrusion process has been described in the petition of the Union Carbide as follows :- "Aluminium slugs or circles purchased from Aluminium manufacturers are lubricated and fed into an impact extrusion press when the slugs are struck by the punch and are converted into a semi plastic state and are pushed into the die, at which stage cans are produced." 10. In the case of Messrs Geep Flashlight Industries Ltd., it has been stated that in the extrusion process a heavy pressure is applied to a ram to continuously squeeze a heavy heated ingot of metal through the die producing a continuous extrusion or extruded shapes and sections according to the shapes of the die, whereas in impact extrusions a small slug is placed in the die and a punch hits the slug at high speed producing the aluminium shell. 11. From this description, it is clear that in the impact extrusion process, Aluminium slugs are pushed through the die. The Aluminium Association of India has produced a Manual of Nomenclature for Aluminium Mill Products. It defines extrusion "as a product formed by pushing ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... We find no merit in the first limb of the submissions made on behalf of the companies. 13. In relation to the second point, we are in agreement with the learned Single Judge that the production of torch bodies from aluminium slugs is manufacture. According to the Supreme Court's decision in the Delhi Cloth Mill's case (AIR 1963 SC 791) there is a significant difference between the 'manufacture and processing'. The term manufacture signifies the bringing into existence of a new substance, and does not mean merely to produce some change in a substance, however, minor and inconsequential the change may be. According to the companies, the aluminium slugs are, by pushing through the die, made into hollow long tabular cans. These cans are entirely a distinct substance than the slugs from which they are made. It could be said that a new substance has been produced from the aluminium slugs. We are in agreement with the learned Single Judge that the process involved in the making of the cans is "manufacture". 14. Alternatively, section 3 of the Central Excises and Salt Act, 1944, authorised levy of excise duty on goods, 'produced' or 'manufactured' in India. Thus the goods falli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hes. They are not known in the trade and are not marketable and hence they are not goods. 17. We have felt several difficulties in upholding this finding. The Government of India Act, 1935 by Section 311(2), defined the term "goods" to include all materials, commodities and articles. The Constitution of India in Article 366 (2) carries the same definition of "goods." A perusal of the Central Excises and Salt Act, 1944 shows that the term "Goods" has been used in the sense defined in the Constitution Acts. Section 3 of the Act provides for levy of excise duty on goods mentioned in the First Schedule. The Schedule was enacted by the Legislature itself. The Schedule groups the various entries under different heads. Entry 5 is headed "crude materials except fuels". Entries 6 to 11 A are grouped under the heading 'Mineral fuels, lubricants and related materials.' Entries 16 to 28 are clubbed together under the heading 'Manufactured goods classified chiefly by materials.' Entries 36 to 41 are entitled as "Miscellaneous manufactured articles." It is thus clear that things that can be identified as materials and articles of the kind described in the First Schedule are goods within th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it. 23. Both the companies have emphasised that they are the only two manufacturers of torches in this country. They have repeatedly stated that no one else produces aluminium cans or torch bodies, because this article is exclusively usable for manufacturing flashlights. The companies do not deny that the aluminium cans are a necessary intermediate product in the manufacture of torches. In the trade of torch manufacturers, this product is well-known and well-used, because no torch can be manufactured without these cans. This product may not be known to the general public or to the traders in general it is known and used by that trade which makes torches. 24. In the case of the Union Carbide India Ltd., it is that in 1966, the company placed an order for these aluminium cans or torch bodies from Messrs Krupp Group of Industries, Lucknow. The company had supplied aluminium slugs to the Group, who, after producing the cans, returned them to the company. This is an example of trade in these cans between two different concerns. It was asserted that the cans were not sold by the Krupp Group. This is not very material, the fact remaining that the Krupp Group manufactured this ..... X X X X Extracts X X X X X X X X Extracts X X X X
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