TMI Blog1988 (5) TMI 47X X X X Extracts X X X X X X X X Extracts X X X X ..... its factory besides manufacturing other cigarettes has also been receiving raw material from its customers, particularly the Golden Tobacco Company Ltd., Bombay and manufacturing cigarettes out of the raw material. While levying the excise duty respondent No. 1 held the petitioner liable to assessment on the actual assessable value of the cigarettes manufactured by it out of the raw material supplied by Golden Tobacco Company. On behalf of the petitioner, the only point canvassed at the time of hearing of the petition is that since it only processes the raw material received from its customers and manufactures cigarettes for them, it cannot be charged excise duty on the basis of the actual assessable value of the cigarettes and that if at a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Supreme Court had an occasion to consider this aspect in Empire Industries Ltd. and Others v. Union of India Others 1985 (20) E.L.T. 179 (SC) = AIR 1986 SC 662 - and after an elaborate discussion on different aspects, their Lordships opined : "It may be noted that the taxable event in the context of sales tax law is 'sale'. The taxable event under the excise law is 'manufacture'. The moment there is transformation into a new commodity commercially known as a distinct and separate commodity having its own character, use and name, whether be it the result of one process or several processes, 'manufacture' takes place and liability to duty is attracted............................" (Emphasis supplied) Apart from this authoritative pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learned counsel for the petitioner that the raw material which is received by the petitioner from Golden Tobacco Company is processed by it and that processing results in the transformation of the raw material into a new commodity, commercially known as "cigarettes", which have distinct character and name. That process, which the learned counsel for the petitioners has styled as "the job" is nothing but process of "manufacture" both according to the definition given in Section 2(f) (supra) and the judgment of the Supreme Court in Empire Industries case (supra). It is not the "operation" which is relevant for determining whether the party is a manufacturer or not. It is the effect of the operation on the commodity which is material for deter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the quantum of "job work charges". Even if it be assumed for the sake of argument (though it is strongly controverted by the respondents) that the petitioner-company itself does not indulge in the sale of the manufactured cigarettes, it would not make any difference because it is not necessary to attract excise duty that the goods should be sold. The "manufacture" of the excisable goods is itself sufficient to attract the excise duty and whether those goods are eventually consumed, sold or not used, is irrelevant. The obligation to pay excise duty under the Act is of the manufacturer of excisable goods and not that of the purchaser or consumer of such goods. On that account also the department has to recover the excise duty from the pet ..... X X X X Extracts X X X X X X X X Extracts X X X X
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