TMI Blog1984 (9) TMI 283X X X X Extracts X X X X X X X X Extracts X X X X ..... uch cells except on the value of the carbon/zinc elements dispatched along with the cells. It appears that from the Memorandum of Association of the Company, its primary objective was to manufacture A.D. Wet Cells. The Assistant Collector, therefore, issued a notice to the appellants alleging violation of Central Excise Rules, 173B, 173F, 173G punishable under Rule 173Q. They were charged with suppression of the fact of manufacture of A.D. wet cells and misdeclaring to the department that they manufactured only the component elements. They were also asked to show cause why differential duty of ₹ 28,763.84 in respect of the clearances made upto 21-12-1979 and the duty payable on the clearances after 21-12-1979 should not be demanded from them under Rule 10 read with Rule 173J. The company denied all the allegations. They stated that they were not manufacturing complete cells or all the parts constituting the cells. Of the several constituent items, the company said, they were manufacturing only the carbon and zinc elements and the remaining items viz. glass jar, porcelain cover, caustic soda, oil etc. were procured from the market and supplied to the Railways. They further sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eliance was placed on the Bombay High Court decision in Commissioner of Sales Tax v. Trinity Products reported in Volume 35 S.T.C. 1975 page 502. In that case the respondents purchased from different registered dealers glass bottles, rubber nipples, and plastic caps and put them loose in a packing carton and sold the same as auto feeders . The question was whether this activity amounted to manufacture within the meaning of Section 2(17) of the Bombay Sales Tax Act, 1959. The Court held that it was not sufficient for an activity to amount to manufacture for the goods purchased to be sold under a different label or trade name, even if that label or trade name is known in the market as a separate commercial commodity different from that by which the goods purchased are known in the market. What was essential was that a commercially different commodity should come into being as a result of one of the activities described in clause 17 of the Section 2, namely, producing, making, extracting, altering, ornamenting, finishing or otherwise processing, treating or adapting any goods. In the case before the court, it was held that there was no manufacture. Even if it was held that the appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facture of which no process is ordinarily carried on with the aid of power , it cannot be said that no power is used in the manufacture of cells, since power is used in the manufacture of carbon and zinc elements which are necessary components of the cells. The appellant s contention in this behalf is not tenable. But the question remains whether the appellants manufactured complete cells i.e. whether there has been manufacture of A.D. wet cells in the appellant s premises. The appellants supplied complete sets of cells admittedly in unassembled condition. The order is for complete sets. The supply is as stated above. The appellants have also submitted a photo copy of their instruction sheet for the assembly of the cell. If they had assembled the cells the benefit of exemption under Notification No. 179/77, would not be admissible. The question, then, really boils down to this : does the supply of the different components of the cells-admittedly in unassembled condition-amount to manufacture of the complete cells. The Departmental Representative has relied upon 1983 E.L.T. 681 (Mad.) in this connection. In that case, taking into account the exigencies of manufacture, package and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss the Bombay High Court decision in (35) S.T.C. 1975 page 502. Apart from this consideration, that decision was given in the context of Section 2(17) of the Bombay Sales Tax Act, 1959 which is not pari materia with Section 2(f) of the Central Excises and Salt Act. 6. In the state of the evidence and submissions before us, we hold that the appellants did not manufacture complete cells. The appeal succeeds and is allowed. [Order per : H.R. Syiem, Member]. - It is not clear to me why the Assistant Collector issued the demand dated 5-6-1980. The demand says that M/s. Carbon Industries Pvt. Ltd. manufactured complete cells i.e. wet air depolarised cells and sold the same to Indian Railways from 18-6-1977 to 21-12-1979. The manufacturer cleared 6413 such complete cells and failed to pay the appropriate duty on them. The demand, however, does not say what was the appropriate rate of duty and what was the tariff item for such complete cells. However, it appears to me that the Assistant Collector proceeded as if the complete cell was also assessable under Item 68 under which the factory had been paying duty on the elements, and that the differential duty was the difference between th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duty may be either under Item 68 or under some other item. If it is Item 68, there is no case for collecting the duty again when they are taken out by this factory, namely, M/s. Carbon Industries Pvt. Ltd., if they have not been subjected to any manipulation or process to change their composition or use or other essential character. If the appropriate item was some other item, we have not been told what that heading is. And it is no answer to charge duty under Item 68 when the appropriate rate of duty was some other item. In any case, since the central excise say that the factory had not paid the appropriate rate of duty on those parts and then proceed to collect duty under Item 68, we can take it that duty under Item 68 was the appropriate rate in the eyes of the central excise. There is, therefore, no case for charging duty under Item 68 again. 5. It is not disputed that the sales represent parts of complete cells. The appellants, of course, say that they do not sell complete cells as they are dispatched in unassembled conditions. But such parts of complete cells will have to be classed as complete cells in knocked down conditions. A battery cell is not assessable under Item 6 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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