TMI Blog1985 (1) TMI 54X X X X Extracts X X X X X X X X Extracts X X X X ..... - petitioner is a public limited company. The Indian Sugar and General Engineering Corporation, Yamunanagar, District Ambala, Haryana (hereinafter referred to as 'ISGEC') is its heavy engineering unit, which is engaged in the manufacture and production of heavy engineering machines and plants for Sugar Mills etc. The petitioner is also running a foundary in the premises of ISGEC. The petitioner, receives old, used and worn out Sugar Mill Rollers for the purpose of reshelling. The petitioner, however, calls this process as repair or reconditioning of the Sugar Mill Rollers. The Sugar Mill Roller consists of two parts, i.e. 'shaft' and 'shell'. On receipt of the worn out roller, the shell which is made of cast iron is broken into pieces. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... distinct marketable article. It does not turn out a commercially different article from the one received by it. 4. On the other hand, the respondents contend that the petitioner firm manufactures the old worn out Sugar Mill Rollers into new ones. The process carried out by the petitioner amounts to 'manufacture'. The old worn out Sugar Mill Roller is nothing but iron scrap. It can no longer be used in the Sugar Mills. The petitioner transforms the iron scraps into serviceable Sugar Mill Rollers. By the efforts of the petitioner, a totally new and a different article emerges. 5. To better appreciate the rival contentions, it will be beneficial to read the statutory provisions at this stage. Central Excises and Salt Act, 1944 : 'S. 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y or more of these processes, or the conversion of any form of the said goods into another form of such goods ; and the word "manufacture" shall be construed accordingly and shall include not only a person who employs hired labour in the production or manufacture of excisable goods, but also any person who engages in their production or manufacture on his own account.' S. 3. Duties specified in the First Schedule to be levied. - (1) There shall be levied and collected in such manner as may be prescribed duties of excise on all excisable goods other than salt which are produced or manufactured in India and a duty on salt manufactured in, or imported by land into, any part of India, as, and at the rates, set forth in the First Schedule. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 2(f) of the Act, is inclusive and inclusive and illustrative. The expression "manufacture" is generally taken to mean as bringing into existence a new substance and does not mean mere production or introduction of some change in a substance. The definition of expression "manufacture" used in the American Jurisprudence has been approved by the Final Court in Union of India and another v. Delhi Cloth and General Mills Co. Ltd. - 1977 E.L.T. (J 117) = AIR 1963 Supreme Court 791. That passage reads thus :- "Manufacture implies a change, but every change is not manufacture " and yet every change of an article is the result of treatment, labour and manipulation. But something more is necessary and there must be transformation; a new an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... regarded as the original commodity bur instead is recognised as a new and distinct article that a manufacture can be said to take place. ... ..." 7. If these tests are applied then it cannot legitimately be said that the petitioner manufactures the Sugar Mill Rollers. The old and worn out Sugar Mill Rollers are received by the petitioner. The outer case shell is broken. The resultant cast iron is melted. A requisite quantity of the metal is added thereto and the same is cast into a shell which is mounted on the shaft. This roller is then machined and grooved. No doubt, the old roller passes through a number of processes and suffers from series of changes, but ultimately what emerges is a Sugar Mill Roller. The only change made is that un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ition. The petitioner only reconditions the old worn out rollers. 9. Even if it be accepted that the shell which is ultimately mounted on the shaft is manufactured by the petitioner, even then this process will not suffer any excise duty. The shell is only an intermediate product. The customer does not place order for the manufacture of a shell. The shell is not sold separately in the market. 10. In a recent case the Bombay High Court in Century Spinning and Manufacturing Company Limited v. Union of India - 1981 E.L.T. 676 held that merely because the worn out spinnerettes were melted or repaired, it cannot be said that new product was manufactured, which was liable to payment of duty. It could not be said that the spinnerettes had lost ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
