TMI Blog1988 (10) TMI 44X X X X Extracts X X X X X X X X Extracts X X X X ..... e manufacture of which any process has been conducted with the aid of machine operated with or without aid of power; and (ii) other biris". By Notification No. 19/75-C.E., dated 1.3.1975 made in exercise of power conferred by rule 8 of the Central Excise Rules, the Central Government exempted other biris falling under Item No. 4 II (3)(ii) from the whole of the duty of excise leviable thereon subject to the proviso contained therein. By a subsequent Notification No. 32/79 exemption was also granted for other biris subject to the provisos contained therein. Both these provisos state that the exemption will not be available to any biris which are sold under a brand name, whether registered or not, that is to say, a name or a mark, such as, a symbol, monogram, label, etc., which is used in relation to such biris for the purpose of indicating a connection in the course of trade between the biris and some person using such name or mark. Briefly stated, the exemption from the levy of excise duty or the concession rates provided under these exemption notifications would be available only to biris which are sold without a label indicating the brand name. 4. For the biris manufactured ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... states that manufacture in relation to tobacco includes labelling or relabelling of containers. Therefore, even though the petitioner may be merely labelling the hand-made biris purchased by him from others, he would still be manufacturer within the definition of Section 2(f)(ia) of the Act. The second submission of the learned Counsel for the respondents is that the averments in the affidavit of the petitioner show that the petitioner is affixing the labels on the biris purchased by him and therefore the affixture of labels on the leaf containers, within which the manufactured tobacco is put, would amount to a process of manufacture. Thirdly the learned Counsel further submits that even otherwise, assuming for the purpose of argument, that the petitioner has been affixing the labels only on the wrapper, within which ten or more biris are bundled, still the wrapper being a container, the same would be a process of manufacture. The fourth submission of the learned Council for the respondents is that the provisos to the Notification Nos. 19/75 and 32/79 are not hit by Article 14 of the Constitution of India. He says that the Government had taken a rational decision to grant exemption ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e in relation to manufactured tobacco would include the labelling of containers. The averments in the affidavit of the petitioner shows that the petitioner is affixing the labels on the biris purchased by him. It is a known fact that manufactured tobacco is put inside a special leaf (Tandoo leaf) and rolled into a biri. The leaf is the container within which the manufactured tobacco is preserved for ultimate use by the consumers. From the averments in the affidavit of the petitioner, it is clear that the brand label is affixed by the petitioner on the biris purchased by him from others. Consequently there is no difficulty in holding that the petitioner is affixing labels on the leaf containers and this process would bring the petitioner within the scope of the word "manufacturer" under the Act, attracting excise duty. The submission of the petitioner is that the brand label is not affixed on the biris, but is affixed only on the wrapper paper, within which ten or more biris are bundled. The submission of the petitioner is that a wrapper is different from a container and since Section 2(f)(ia) mentions only the container and not a wrapper, labelling the wrapper is not a process of m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... impossible to conceive that the word 'container' will comprise packages, boxes, caskes, receptacles, tubes, sacks, etc. A wrapper paper when used to contain certain number of biris can certainly fall within the word 'container' occurring in Section 2(f)(ia) of the Central Excise Act. Therefore, the resultant position is that even if the petitioners were to affix the labels only on the wrapper paper which contains biris, such process of affixing labels would come within the definition of manufacture attracting the levy of excise duty. Hence the first two submissions of the learned Counsel for the petitioner are rejected as unsustainable. 14. The third submission of the petitioner is that the provisos to Notification Nos. 19/75 and 32/79 are violative of Article 14 of the Constitution of India in so far as they make classification between the branded biris and unbranded biris. This submission of the petitioner is misconceived. In fact, there is no classification involved. It is simply a case of grant of exemption. Rule 8 states that the Central Government may, from time to time, by notification in the Official Gazette, exempt subject to such conditions as may be specified in the n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spect of which the conditions are imposed or that the conditions are not consistent with the operative provisions of the Act itself. 16. In the instant case, affixing of brand label on the container has been held to be included within the definition of manufacturing process. If that be so, an exemption granted depending on a part of manufacturing process, viz., a germane fact would be valid. In this view of the matter, it cannot be held that grant of exemption under the impugned notification restricting to unbranded biris is either unreasonable or arbitrary. The exemption has rightly been restricted by exercise of the power under Rule 8 of the Central Excise Rules, which enables the Government to grant exemption subject to such conditions as may be specified. 17. Though much might be said in favour of the respondents, on the two technical objections raised by them, namely, that the petitioner is guilty of laches and if refund is ordered at this distance of time, it would result in unjust enrichment of the petitioner, it is not necessary to go into the details of these two contentions since it has already been held that the petitioner's contentions that no manufacturing process ..... X X X X Extracts X X X X X X X X Extracts X X X X
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