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2016 (10) TMI 274 - JHARKHAND HIGH COURT

2016 (10) TMI 274 - JHARKHAND HIGH COURT - TMI - Manufacture - change in tariff heading after processing - activities for processing TMT coils into TMT bars/rods after de-coiling, straightening and cutting into size - Held that:- no error has been committed by the Customs, Excise and Service Tax Appellate Tribunal - conversion of TMT coils into TMT bars and TMT rods is not manufacturing at all, even if, these two items are mentioned under different Sub-Headings of the Central Excise Tariff Act, .....

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ginal commodity, but, instead is recognized as a new and distinct article that has emerged as a result of processes then a manufacture can be said to have taken place. This is the test to be applied for arriving at a conclusion whether the process applied upon the product amounts to manufacturing or not. It has been held by the Hon'ble Delhi High Court in the case of Faridabad Iron & Steel Trader Association Vs. Union of India [2003 (11) TMI 107 - HIGH COURT OF DELHI] that while examining justif .....

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n coil remains steel even after cutting. No new, different and distinct article emerges having distinct name, character and use. Therefore, mere cutting and slitting would not amount to manufacture. We are also clearly of the view that merely because of change in tariff item, the good does not become excisable. Therefore, by following the same, the activities for processing TMT coils into TMT bars / rods after de-coiling, straightening and cutting into size does not amounts to manufacturing proc .....

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th July, 2006/31st July, 2006 passed by the Customs, Excise and Service Tax Appellate Tribunal (hereinafter to be referred to as 'CESTAT') in Appeal Nos. EDM- 01-03 of 2005 East Regional Bench, Kolkata which is the impugned order, whereby the appeals preferred by the respondents were allowed and order-in-original no. 9- 14/Commissioner/2005 passed by the Commissioner, Central Excise, Jamshedpur dated 29th September,2005 was quashed and set-aside. Being aggrieved and dissatisfied by the o .....

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to TMT bars / rods after de-coiling, straightening and cutting into size amounts to manufacturing process ? ARGUMENTS ADVANCED ON BEHALF OF APPELLANT 2. Learned counsel for the appellant has submitted that in the facts of the present case, TMT coil has been processed further by CASTINGS (India) INC.-respondent no.1 and the same is converted into brand name of 'TISCON' TMT Bars. This manufactured item is classifiable under Sub-Heading No. 7214.90 of the Schedule to the Central Excise Tari .....

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so giving different name to this commodity i.e. TMT bars. Thus, there is manufacture of TMT bars from TMT coils. The total manufacturing process has been mentioned in the showcause notices dated 7th May,2003, 30th May, 2003, 9th July, 2003, 16th March, 2004, 18th October, 2004 and 25th February, 2005, issued by the appellant to the respondents. Ad valorem duty at the rate of 16% has been prescribed under the Central Excise Tariff Act,1985 as leviable and, hence, there will be huge difference in .....

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and TMT rods from TMT coils and the said items are falling under Sub-Heading 7214.90 of the Central Excise . TMT coil is an altogether different item falling within Sub-Heading 7213.90 of the Act, 1985 and this manufacturing process includes the process of de-coiling, straightening and cutting into size as per requirement. This aspect of the matter has not been properly appreciated by the CESTAT and, hence, order and judgment passed by the CESTAT dated 27th July,2006/31st July, 2006 in Appeal No .....

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15 percentage of the cost of production and there is contravention of the provision of Section 4 and 6 of the Central Excise Act, 1944 and violation of Rules 4,6,8,9,10,11 and 12 of the Central Excise Rules, 2002 and as there was evasion of central excise duty for the different periods, the aforesaid show-cause notices were issued and they were held liable for payment of excise duty as well as the interest and penalty etc. It has further been submitted that TMT bars and TMT rods have been cleare .....

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mposed upon TISCO Ltd.-Respondent no.2. Interest at the appropriate rate has also been held as leviable by the respondent no.2. For Tax Appeal no. 22 of 2007 the excise duty assessed was ₹ 4,39,76,279/- and equal amount of penalty had been imposed upon Tisco Ltd. Jamshedpur and interest at the appropriate rate has also been imposed. It is submitted by counsel for the appellant that both the items viz. TMT coils as well as TMT bars and TMT rods are absolutely different items and are also co .....

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ems are mentioned under different Sub-Headings of the Central Excise Tariff Act, 1985. It is further submitted that commercially no new article has been manufactured, even if, TMT coils has undergone some processes. It has further been submitted by counsel for the respondents, that in fact, there is no difference between TMT coils and TMT bars and rods. TMT coils are coiled for easy transportation etc. and nothing beyond that. For conversion of TMT coils into TMT bars and rods, the only processe .....

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zes, the said bars/steels and then they use to deliver the same to TATA STEEL's Stockyards and for the said work CASTINGS India and TATA RYERSON receive processing charges as per terms and conditions agreed. Thus, in fact, there is no manufacturing at all. This aspect of the matter has been properly appreciated by the CESTAT by passing order dated 27th July,2006/31st July, 2006 passed in Appeal Nos. EDM-01-03 of 2005. Counsel for the respondents relied upon the following decisions: (a) Farid .....

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s Vs. Additional Collector of Central Excise reported in 1996 (88) ELT 635 (SC) (g) Commissioner of C.Ex. Chennai-II Vs. Tarpaulin International reported in 2010 (256) ELT 481 (SC) (h) Commissioner of Central Excise Vs. S.r. Tissues Pvt. Ltd. reported in 2005 (186) ELT 385 (SC) (I) Servo-Med Industries Pvt. Ltd. Vs. Commissioner of C.Ex. reported in 2015 (319) ELT 578 (SC) (j) Commissioner of C.Ex. Vs. Tejo Engineering Services P.Ltd. reported in 2015 (322) ELT 418 (SC) (k) Satnam Overseas Ltd. .....

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dents Ltd. reported in 2006 (193) ELT 129 (SC) (q) Commissioner of C.Ex. Vs. Swastik Rayon Processors reported in 2007 (209) ELT 163 (SC) On the basis of aforesaid decisions, it is submitted by counsel for the respondents that merely because there is value addition, it does not mean that manufacture has taken place and, hence, there is no liability upon the respondents to make payment of central excise duty. It is also submitted that in view of the aforesaid decisions, even if there is cutting o .....

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ess of cutting of TMT coils for which TMT coils are bound to be de-coiled and are also bound to be straightened, otherwise cutting cannot be done. Thus, in fact, there is only one process i.e. cutting involved in the process undertaken by the conversion agent namely viz. CASTINGS India Ltd. and hence, there is no commercially different item or commodity made by the CASTINGS India Ltd. This aspect of the matter has been properly appreciated by the CESTAT while quashing and setting aside the order .....

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s preservative. In the facts of the present case, there is no addition of any item like preservative, sugar, etc. It is only basically cutting and nothing beyond that and for easy cutting of the TMT coils firstly de-coiling is must then straightening and thereafter cutting. In fact, there is no change in the original commodity. No new commodity has been manufactured and, hence, these Tax Appeals may not be entertained by this Court as there is no substantial question of law involved in these Tax .....

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? The test to be applied is: whether essential character of the product is changed or not ? In the facts of the present case, essential character of the TMT coil remain as it is. The issues which are raised in these Tax Appeals are no more res-integra as the same have already been decided in view of the aforesaid decisions of the Hon'ble supreme Court. Hence, these Appeals may not be entertained by this court. REASONS: 4. Having heard counsel for both sides and looking to the facts and circ .....

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986) as amounting to [manufacture; or] [(iii) which in relation to the goods specified in the Third Schedule, involves packing or repacking of such goods in a unit container or labelling or relabelling of containers including the declaration or alteration of retail sale price on it or adoption of any other treatment on the goods to render the product marketable to the consumer ;] and the word manufacture shall be construed accordingly and shall include not only a person who employs hired labour .....

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ing a distinct name, character and use, after the process applied upon the original product, there is no manufacturing at all and, the resultant product cannot be said to have emerged because of manufacture. Commercially new and distinct articles ought to emerge out of the process applied. To ascertain as to whether the manufacturing process has taken place or not, a test is to be applied, whether change or series of changes take the commodity to a point where commercially it can no longer be re .....

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agraph no. 85,86 and 90 which are as under: 85. In the light of ratio of various judgments the generally accepted test for imposing excise duty is to ascertain whether the manufacturing in fact had taken place or not ? It is imperative to apply this test to ascertain whether the change or series of changes brought about by the application of processes take the commodity to the point where , commercially it can no longer be regarded as the original commodity but is instead recognized as a distinc .....

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y the manufacturer, it is sheet in coil form and unfolded it is sheet as such and accordingly there is no difference in the steel sheets in coil form or cut straight to the specific sizes. The coils in running length are produced to save transportation cost and to minimize the wastage as during the cutting of the steel coils. 90. While examining justifiability of Excise Duty we must clearly comprehend that Excise Duty can be imposed on the manufacture of goods produced in India and that also on .....

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e cutting and slitting would not amount to manufacture. We are also clearly of the view that merely because of change in tariff item, the good does not become excisable. On the application of aforesaid test, our conclusion is clear that the impugned circular dated 792001 is wholly unsustainable and has to be quashed and we order accordingly. (Emphasis supplied) It has been held by the Hon'ble Supreme Court in the case of Commissioner of Central Excise, New Delhi Vs. S.R. Tissues Pvt. Ltd. re .....

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2008 (231) ELT 577 (SC) If the identity of the product remains unchanged even after the processes applied upon it, then also it will not tantamount to manufacture as reported in 2010 (256) ELT A 16 (SC) [Commissioner V. Bemcee Ltd.] If the resultant product maintains its original character then there is no manufacturing at all, even if some processes undergone like cutting, slitting/sawing etc. as held by the Hon'ble Gujrat High Court in the case of Commissioner of Customs Vs. Posco India D .....

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dity produced by the manufacturer, the commodity cannot be said to have been manufactured. Every change is not a manufacture. Stitching of Tarpaulin sheets and eyelets does not change the basic character of the raw material and the end product does not bring into existence the new and distinct product with total transformation in original commodity. The process involved may be cutting, slitting and fixing of eyelets, but, no new article is emerging out of the raw material - tarpaulin sheets. Man .....

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81 (SC) reads as under: 13. The result of the definition contained in Section 2 (f) of the Act is that the word manufacture means production of an article for use from raw or prepared materials, by giving these materials new form, quality, properties or combinations whether by hand labour or machinery. The word includes any process incidental or ancillary to the process of manufactured product. This Court has in several judgments starting from Tungabhadra Industries V. CTO, (1961) 2 SCR 14, Unio .....

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ion, a new and different article must emerge, having a distinctive name character or use. 15. Whenever a commodity undergoes a change as a result of some operation performed on it or in regard to it, such operation would amount to processing of the commodity. However, this court in the case of India Cine Agencies v. Commissioner of Income Tax, Madras, [2008 (233) E.L.T. 8 (SC)] observed, that, it is only when the change or a series of changes takes the commodity to the point where commercially i .....

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esult 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. 23. Is there any manufacture when Tarpaulin sheets are stitched and eyelets are made ? In our view, it does not change basic characteristic of the raw material and end product. The process does not bring into existence a new and distinct product with total transformation in the original commodity. The o .....

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Therefore, even if there is value addition the same is minimum. To attract duty there should be a manufacture to result in different Goods and the Goods sought to be subject to duty should be known in the market as such. (Emphasis supplied) It has been held by the Hon'ble Supreme Court in the case of Commissioner of Central Excise Vs. S.R.Tissues Pvt.Ltd. reported in 2005 (186)ELT 385 (SC) in paragraph no.12 as under: 12. At the outset, we may point out that the assessee is one of the downs .....

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teristics of the tissue paper are its texture, moisture absorption, feel etc. In other words, the characteristics of table napkins, facial tissues and toilet rolls in terms of texture, moisture absorption, capacity, feel etc. are the same as the tissue paper in the jumbo rolls. The said jumbo rolls cannot be conveniently used for household or for sanitary purposes. Therefore, for the sake of convenience, the said jumbo rolls are required to be cut into various shapes and sizes so that it can be .....

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ssue. In the present case, the Tribunal was right in holding that the characteristics of the tissue paper in the jumbo roll are not different from the characteristics of the tissue paper, after slitting and cutting, in the table napkins, in the toilet rolls and in the facial tissues. (Emphasis supplied) In view of the aforesaid decisions if the characteristics of the raw material and final product remain as it is, there is no manufacture at all, even though, there is process of unwinding, cuttin .....

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es Pvt. Ltd. Vs. Commissioner of C.Ex., Mumbai reported in 2015 (319) ELT 578 (S.C.) at paragraph nos. 9,10,20 and 27 which reads as under: Distinction between manufacture and marketability 9. A duty of excise is levied on the manufacture of excisable goods. Excisable goods are those goods which are included in the schedules of the Central Excise Tariff Act,1985. Excisable goods brings in the concept of gods that are marketable,that is goods capable of being sold in the market. On the other hand .....

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o be, and it is required to be changed into various shapes and sizes so that it can conveniently be used, no transformation takes place if the character and the end use of the first product continue to be the same. An illustration of this principle is brought out by the judgment in CCE, New Delhi V. S.R.Tissues, 2005 (186) ELT 385 (S.C.). On facts, in the said case, jumbo rolls of tissue paper were cut into various shapes and sizes so that they could be used as table napkins, facial tissues and .....

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trimming and chamfering. It was in this situation that the test laid down was that if by adopting a particular process a transformation takes place which makes the product have a character and use of its own which it did not bear earlier, then such process would amount to manufacture irrespective of whether there was a single process or several processes. 27. The case law discussed above falls into four neat categories. (1) Where the goods remain exactly the same even after a particular process, .....

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ed into something different and / or new after a particular process, but the said goods are not marketable. Examples within this group are the Brakes India case and cases where the transformation of goods having a shelf life which is of extremely small duration. In these cases also no manufacture of goods takes place. (4) Where the goods are transformed into goods which are different and/or new after a particular process, such goods being marketable as such. It is in this category that manufactu .....

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into existence with original product losing its original character. (Emphasis supplied) Even after applying the process or treatment there is labour and manipulation upon the raw material, but, if no new product is emerging out, there is no manufacturing at all and the end product continues to remain in its original character. Process of drawing wires from wire rods does not amount to manufacture as both the products are wire and the product is not considered as excisable as has been held by the .....

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s. Pan Pipes Resplendents Ltd. reported in 2006 (193) ELT 129 (SC) In view of the aforesaid decisions, the process applied upon the raw material if converts a raw material into a commercially different product which is marketable or if a new and distinct product is emerging out of the process applied or the characteristics of the new product and the rawmaterial are materially different, the process applied upon the raw material tantamounts to manufacture. (ii).WHETHER DECOILING, STREIGHTENING AN .....

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involved in the present case applicable upon the TMT coil is cutting,otherwise,there is no change in the character of the TMT coil. Thus, the question is to be decided whether the cutting of TMT coil is manufacturing or not ? Various decisions have been pointed out to this court which have discussed the process of cutting. It has been held that cutting per-se is not manufacturing at all. It is held by the Hon'ble Supreme Court in a case of The Deputy Commissioner, Sales Tax (Law), Board of .....

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swer given by the Hon'ble Supreme Court is in negative and it has been held that even if the original commodity experienced a change, such change would not amount to manufacture unless, it ceased to be the original commodity and a new and distinct article is produced therefrom. It has been held by the Hon'ble Supreme Court in the case of Aman Marble Industries Pvt. Ltd. vs. Collector of Central Excise, Jaipur reported in 2003 (157) ELT 393 (SC) in paragraph nos. 2,3 and 4 which are as un .....

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after such activity is completed the marble will remain marble and, therefore, this activity does not attract tax. 3. Learned counsel for the Department, however, submitted that the activity has been specifically brought into tariff item and when certain processes are applied to a commodity to make it marketable, it certainly amounts to manufacture and thereof attracts tax under the Central Excise Act. 4. In Rajasthan State Electricity Board v. Associated Stone Industries & anr-JT 2000 (6) .....

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name, character or use after undergoing some transformation. When no new product as such comes into existence, there is no process of manufacture. Cutting and polishing stones into slabs is not a process of manufacture for obvious and simple reason that no new and distinct commercial product came into existence as the end product still remained stone and thus its original identity continued. and this position was further reiterated as follows: ........It is not possible to accept that excavatio .....

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se of Commissioner of Central Excise MumbaiV Vs. Swastik Rayon Processors reported in 2007 (209) ELT 163 (S.C.) that the process of twisting and doubling of cellulosic filament yarn with a blended yarn comprising polyester and viscose does not amount to manufacture because no new commodity has emerged by doubling or multi folding of the yarn. As cutting per-se does not tantamount to manufacture, likewise, welding of stepped transmission poles/pipes or joining of three pipes, one with other, of d .....

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'ble Delhi High Court that cutting of coils by using cutter machine into desired length does not amount to manufacture, as no new product is emerging out. It has been held in paragraph nos. 16,17,18 and 25 which are as under: 16. In another case CCE V. Kutty Flush Doors & Furniture Co. Pvt. Limited reported as 1988 (35) E.L.T. 6 (S.C.) the Supreme Court held that conversion of timber logs into sawn timber is not manufacture as no new product emerges . 17. Reliance has also been placed on .....

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liance has been placed on Collector of Central Excise, Chandigarh v. Steel Strips Ltd. reported as 1995 (77) E.L.T. 248 (S.C.) . In this case the court observed that coldrolled steel strips produced out of duty paid hotrolled steel strips do not undergo a process of manufacture hence, not liable to duty again. 25. The Hon'ble Supreme Court in Civil Appeal No. 3518/90 [1996 (83) E.L.T. A 109 (S.C.)] filed by Collector of Central Excise affirmed the findings of the Tribunal that cutting of the .....

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5 which are as under that cutting / slitting of steel sheet does not amount to manufacture since no new or distinct article is coming out: 4 The later Circular dated 2nd March, 2005 accepts the judgment of the Delhi High Court and withdraws the earlier Circular dated 7th September, 2001. Thus, the position is now made clear that cutting and slitting of steel sheets and polyester films used for lamination purposes do not amount to manufacture according to Board which is binding on the Department. .....

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ity for fresh consideration. We find no merit in this argument for the simple reason that in these cases we are concerned with the period up to 2001. At that time the previous Circular dated 7th September, 2001 held the field. That Circular was applied for the past period. That Circular essentially proceeded on the basis of interpretation of the tariff items and not on examination of the entire process undertaken by the assessees. In these cases also show cause notice clearly indicates that the .....

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(SC) that slitting/shearing of steel coils does not tantamount to manufacture as the identity of the product remained unchanged. It has been held by the Hon'ble Supreme Court in the case of Commissioner of Central Excise Vs. S.R.Tissues Pvt. Ltd. reported in 2005 (186) ELT 385 (SC) in paragraph nos. 12,14 and 16 which are as under: 12. At the outset, we may point out that the assessee is one of the downstream producers. The assessee buys dutypaid jumbo rolls from M/s Ellora Paper Mills and .....

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rds, the characteristics of table napkins, facial tissues and toilet rolls in terms of texture, moisture absorption, capacity, feel etc. are the same as the tissue paper in the jumbo rolls. The said jumbo rolls cannot be conveniently used for household or for sanitary purposes. Therefore, for the sake of convenience, the said jumbo rolls are required to be cut into various shapes and sizes so that it can be conveniently used as table napkins, facial tissues, toilet rolls etc. However, the end us .....

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he tissue paper in the jumbo roll are not different from the characteristics of the tissue paper, after slitting and cutting, in the table napkins, in the toilet rolls and in the facial tissues. 14. Applying the above tests, we hold that no new product had emerged on winding, cutting/slitting and packing. The character and the enduse did not undergo any change on account of the above mentioned activities and, therefore, there was no manufacture on first principles. 16. In the case Shyam Oil Cake .....

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in respect of that commodity. In that matter, the question which arose for determination waswhether refining of edible vegetable oil, as a process, constituted manufacture . It was held that the product even after refining continued to remain an edible vegetable oil. It was further held that neither in the section note nor in the chapter note, refining as a process was indicated as amounting to manufacture. In the circumstances, it was held that refining of edible vegetable oil did not amount t .....

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icable to the facts of this case. (Emphasis supplied) Issue involved in this case was whether process of unwinding , cutting and slitting of Jumbo rolls of Tissue Paper would tantamount to manufacture. The answer given by the Hon'ble Supreme Court is in negative because essentially the end product is the same. There is no change in the main characteristic of the raw material and final product. Thus, by the activity of decoiling, straightening and cutting into sizes of TMT coils into TMT bars .....

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in the process of decoiling, straightening and cutting into desired sizes, but, the rawmaterial and end product after cutting remains the same. It has been held by the Hon'ble Supreme Court in the case of Satnam Overseas Ltd. Vs. Commissioner of Central Excise reported in 2015 (318) ELT 538 (SC) in paragraph nos. 12,13,17 and 18 as under. 12. Though the authorities below had decided against the assessee, this Court reversed the said view holding that the said process would not amount to  .....

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s that in the end product the betel nut remains a betel nut . The said observation of the Tribunal depicts the status of the product prior to manufacture and thereafter. In those circumstances, the views expressed in the D.C.M General Mills Ltd. (Supra) and the passage from the American judgment (supra) become meaningful. The observation that manufacture implies a change, but every change of not manufacture and yet every change of an article is the result of treatment, labour and manipulation is .....

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end product was still a betel nut and there was no change in the essential character to that article even when it was the result of treatment, labour and manipulation, inasmuch as even after employing the same it had not resulted in the manufacture of a new product as the end product continued to retain its original character. 17. Last judgment to which we would like to refer to is Deputy Commissioner Sales Tax (Law), Board of Revenue (Taxes), Ernakulam V. PIO Food Packers 1980 (6) E.L.T 343 (S. .....

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#39;manufacture'. Giving the answer in the negative, the Court held that even when with each process suffered, the original commodity experienced a change, such a change would not amount to 'manufacture' unless it seized to be the original commodity and a new and distinct article was produced therefrom. This is explained in detail in paras 4 and 5 of the said judgment and therefore, we would like to reproduce the same as under: 4. Section 5A (1) (a) of the Kerala General Sales Tax Ac .....

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olved in its manufacture. Commonly, manufacture is the end result of one or more processes through which the original commodity is made to pass. The nature and extent of processing may vary from one case to another, and indeed there may be several stages of processing and perhaps a different kind of processing at each stage. With each process suffered, the original commodity experiences a change. But it is only when the change, or a series of changes, take the commodity to the point where commer .....

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ases has been placed before us by the parties, and in each of them the same principle has been applied: Does the processing of the original commodity bring into existence a commercially different and distinct article ? Some of the cases where it was held by this Court that a different commercial article had come into existence include Anwarkhan Mehboob Co. v. The State of Bombay and Others (where raw tabacco was manufactured into bidi patti), A Hajee Abdul Shukoor and Co. v. The State of Madras .....

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s Ltd., Kurnool v. Commercial Tax Officer, Kurnool (where hydrogenated groundnut oil was regarded as groundnut oil) and Commissioner of Sales Tax, U.P. ,Lucknow v. Harbiles Rai and Sons (where bristles plucked from pigs, boiled, washed with soap and other chemicals and sorted out in bundles according to their size and colour were regarded as remaining the same commercial commodity, pigs bristles). 18. Another important aspect which needs to be highlighted from this judgment is that the argument .....

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albeit in slice form and continued to be known as pineapple in the market. For this proposition the Court decided to reply upon a foreign judgment where the U.S. Supreme Court had held that dressed and frozen chicken was not a commercially distinct article from the original chicken. Detailed discussion of the said judgment appears in para 7 which reads as follows: 7. While on the point, we may refer to East Taxes Motor Freight Lines v. Frosen Food Express, where the U.S. Supreme Court held that .....

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cotton seed in the field and cotton seed at the gin, than between a chicken in the pen and one that is dressed. The ginned and baled cotton and the cotton seed, as well as the dressed chicken, have gone through a processing stage. But neither has been 'manufactured' in the normal sense of the word. Referring to AnheuserBusch Brewing Association v. United States the Court said: Manufacture implies a change but every change is not manufacture and yet every change in an article is the resu .....

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ved in preparing pineapple slices from the original fruit, the commodity continues to possess its original identity, notwithstanding the removal of inedible portions, the slicing and thereafter canning it on adding sugar to preserve it. It is contended for the Revenue that pineapple slices have a higher price in the market than the original fruit and that implies that the slices constitute a different commercial commodity. The higher price, it seems to us, is occasioned only because of the labou .....

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al identity of the two, but is derived from the mere form in which the fruit is desired. Learned Counsel for the Revenue contends that even if no manufacturing process involved, the case still falls within Section 5(1) (a) of the Kerala General Sales Tax Act, because the statutory provision speaks not only of goods consumed in the manufacture of other goods for sale but also goods consumed otherwise. There is a fallacy in the submission. The clause, truly read,speaks of goods consumed in the man .....

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market of TMT Bars/Rods in comparison with demand of TMT coils. Unless the end product is different, distinct and separate marketable from raw material, there is no manufacture at all, even though the end product fetches higher price. It has been held by the Hon'ble Supreme Court in the case of Collector of Central Excise Vs. Technoweld Industries reported in 2003 (155) ELT 209 (SC) in paragraph no. 7 which is as under: 7. This Court was also taken through the processes, which are undergone .....

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e final product the market price was approximately ₹ 15,000/per metric ton. It was submitted that under these circumstances, the Court must now hold that the earlier decisions of the Tribunal are not correct and that the final product i.e. the Wire which is drawn by the cold drawing process is an excisable product. (Emphasis supplied) In view of the aforesaid decisions it appears that when the duty paid wire rods were further processed and turned into a thinner gauge from the wire rods, it .....

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96 (88) ELT 635 (SC) in paragraph no. 5,7 and 8 which are as under: 5. In the case of M. Basheer Ahammed V. Collector of Central Excise [1990 (48) ELT 591 (Tribunal)]. The same question arose before a two Member Bench of the Tribunal. It noted the judgments that are under appeal before us and preferred to follow the dissenting view. It held that the recording of sound on such tapes was not a process that fell within the ambit of the definition of manufacture. Accordingly, the recoding of sound o .....

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ould vary with the added value of the tapes. Hence, an interference could not be drawn from the separate categorization that the recording of sound on duty paid tapes was manufacture. 7. The manufacturer of tapes may manufacture and sell blank tapes upon which the purchaser would be free to record such sound as he chose. The manufacturer may go one step forward and record sound itself and sell such tapes. It is to cover both eventualities that Tariff Item 59 is categorized as it is. But it is al .....

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afore stated. It is therefore, unnecessary to go into the alternative argument based on an exemption notification. (Emphasis supplied) In view of the aforesaid decisions if on a job work basis, the assessee is recording sound in spool magnetic tapes, no process of manufacture is involved even though there may be value enhancement in the end product in comparison to the raw-material. It has been held by the Hon'ble Supreme Court in the case of Commissioner of Central Excise Vs. S.R.Tissues P .....

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ion, it does not mean that the process undergone for cutting or slitting of jumbo rolls is a manufacture. Thus, the contention raised by counsel for the appellant that as there is value addition for the end product TMT bars/ rods and, therefore, the process applied upon TMT coil amounts to manufacture, is not accepted by this court. (iv) DIFFERENT TARIFF ENTRIES: Learned counsel for the appellant has submitted that Entry no.72.13 and 72.14 are different as per schedule attached to the Central Ex .....

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16.00% 72.14 72.14 Other bars and rods of iron of non-alloy steel, not further worked than forged, hotrolled, hot-drawn or hotextruded but including those twisted after rolling 7214.10 Forged 16.00% 7214.20 Of freecutting steel 16.00% 7214.90 Other 16.00% (Emphasis supplied) Merely because TMT coil is classified under Entry no. 72.13 and TMT bars/rods are classified under Entry no. 72.14 it does not mean that process applied upon TMT coil i.e. de-coiling, straightening and cutting into desirabl .....

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roduct it does not become excisable. To become excisable goods, there should be manufacturing and the goods must be marketable. It has been held by Hon'ble Supreme Court in a case reported in 1996 (88) ELT 635 (SC) at paragraph no. 5 that after recording of the sound of magnetic cassettes or tapes or spool magnetic tapes, the end product may be covered by another tariff entry, but, the process of recording of sound of such tapes does not tantamount to manufacturing. It has been held by the H .....

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esumed that the process of obtaining the finished product from such raw material automatically constituted manufacture. In the present case, merely because tissue paper in the jumbo roll of the size exceeding 36 cms. Fell in one entry and the toilet roll of a width not exceeding 36 cms fell in a different entry, it cannot be presumed that the process of slitting and cutting of jumbo rolls of toilet tissue paper into various shapes and sizes amounted to manufacture. (Emphasis supplied) Thus, even .....

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firstly de-coiling then straightening and thereafter cutting. Thus, the process involved is cutting the TMT coils, but, no new product is emerging out, after such process. In fact, the burden of proof is upon the department-appellant that the process undergone, is a manufacture, but, no material has been adduced by the counsel for the appellant to show that the process of de-coiling, straightening and cutting has transformed TMT coils into a new marketable product. It has been held by the Hon&# .....

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manufacturing at all because essentially the article remains as it is. No new product is manufactured. In paragraph no.8 of the said judgment it has been held as under: 8. We are unable to agree with the submission. It is to be seen that the initial product was a wire rod. The ultimately product is also a wire. All that is done is that the gauge of the rod is made thinner and the product is finished a little better. In our view the earlier decisions of the Tribunal are correct. There is no manuf .....

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rporation Vs. Commissioner of Central Excise reported in 2006 (196) ELT 400 (SC) at para 37 which is as under: 37. We have heard learned counsel for the parties at length. We have also carefully perused the pleadings and examined a series of cases decided by this Court. The following conclusions are irresistible. (1) The process carried out by the appellants do not change the basic identity of original character of M.S. Welded Pipes to make it a new marketable product leading to manufacture as d .....

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e the ambit of specified entries. Unless the Department can establish that the goods in question can by no conceivable process of welding be brought under any of the tariff items, resort cannot be had to the residuary item. (Emphasis supplied) Even if there is change in the tariff entry for the end product, may be falling within residuary entry, it does not mean that process of manufacture has taken place. There is neither section note nor chapter note. Thus, in the facts of the present case, ne .....

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