TMI Blog1997 (12) TMI 110X X X X Extracts X X X X X X X X Extracts X X X X ..... uty will undoubtedly be on the value of the printed bottles which will include not only the cost of manufacture of the bottles but also the cost of printing charges. The Revenue cannot be permitted to levy duty twice on the same item when there is no warrant therefor in the relevant provisions of the Act. Appeal allowed of assesse. No difficulty in holding that the view taken by the Appellate Tribunal is erroneous inasmuch as the process of printing is being carried out in a separate premises as found by the Tribunal and such process is not `manufacture' within the meaning of the Act. - Civil Appeal No. 767 of 1991 2882 of 1993, W.P. No. 2703 of 1983, S.L.P. (Civil) No. 8316 of 1994, - - - Dated:- 9-12-1997 - S.C. Sen and M. Srinivasan, JJ. N.K. Bajpai, K.C. Kaushik, V.K. Verma, P. Parmeswaran and Ms. Sushma Suri, Advocates, for the appellants. Soli J. Sorabjee and Joseph Vellapally, Senior Advocates (Ms. Nisha Bagachi, Indu Malhotra and Trideep Pais, Advocates, with them), for the respondents. [Judgment per : M. Srinivasan, J.]. - The common question which arises for decision in these two appeals and Special Leave Petition is whether printing on glass bo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the decoration of glass bottles is being carried out is separate from the factory manufacturing the said bottles. The following passage in the order of the Tribunal is relevant in this regard :- Admittedly, the ACL Unit is located in the enclosed space with an opening on the main road apart from the gate of the factory licensed for the manufacture of glassware. The shed in which the ACL Unit is located, was also excluded from the lay out of the factory. From the above, it follows that the ACL Unit, which was carved out of the old premises is a space covered by walls and is adjunct to the principal premises i.e. the licensed premises. Again the Tribunal has observed in Para 20 of its order that admittedly the plain bottles are manufactured in the main premises and the printing and decoration is done in the premises adjunct to it . 5.It is on the above factual premise the question stated above which was formulated by the Tribunal itself has to be considered. The Tribunal has proceeded to hold that printing and decoration would amount to manufacture within the meaning of Section 2(f) of the Act. 6.In Civil Appeal No. 2882 of 1993 the appellant is the Union of India. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ved thereby the Union of India has preferred the Petition for Special Leave. Insofar as this case is concerned, there is no dispute regarding the fact that the respondents are only carrying on the process of decoration and printing and have nothing to do with the manufacture of bottles as such. 9.The contention of the assessee is that printing and decorating bottles will not by any stretch of imagination amount to manufacture. It is argued that unless the process brings into existence a different commercial product, it cannot be said to be manufacturing process. In short, the contention is that the plain bottles do not cease to be bottles by some logos or names being printed thereon. Reliance is placed on a judgment of this Court in Union of India v. Delhi Cloth General Mills - 1977 (1) E.L.T. (J 199) (S.C.) = 1963 Supp. (1) S.C.R. 586. Our attention is drawn to the following passage :- On a consideration of all these materials we have no doubt about the correctness of the respondents' case that the raw oil purchased by the respondents for the purpose of manufacture of Vanaspati does not become at any stage refined oil as is known to the consumers and the commercial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... modity but instead is recognized as a new and distinct article that a manufacture can be said to take place. Where there is no essential difference in identity between the original commodity and the processed article it is not possible to say that one commodity has been consumed in the manufacture of another. Although it has undergone a degree of processing, it must be regarded as still retaining its original identity . 11.In Rollatainers Ltd. v. Union of India - 1994 (72) E.L.T. 793 (S.C.) the question arose with reference to the applicability of exemption pertaining to products of the printing industry. The Notification specified the goods as all products of printing industry including newspapers and printed periodicals . The contention of the appellant was that printed cartons are a product of printing industry and as such exempt from duty under the Notification. Rejecting that contention the Court said :- According to the appellant-company printed cartons are known and understood in the trade as products of the Printing Industry. The dominant activity in the manufacture of a printed carton is the printing activity and the cutting, creasing and gluing, if any, are only s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e printing is done to identify the goods or its manufacturer. In our view, the mere fact that something is printed on a product by itself does not make it a product of the printing industry. A carton is a carton and has only one use, namely of; packing a product to be sold in the market. The mere fact that something is printed on it does not change its essential nature or use. The learned Judge has observed that the end-use of a product is immaterial. In the case of a carton the question does not arise, because it has only one use and therefore any distinction between its intermediate use and end-use is unwarranted. In our view, the printed cartons are designed at times to make the product attractive for the purchaser, and at times to identify the goods and highlight its qualities, and at times to identify the manufacturer of the goods. All the same, the carton remains a carton and is used for the purpose of packaging. ....What is exempt under the Notification is the product of the Printing Industry . The Product in this case is the carton. The Printing Industry by itself cannot bring the carton into existence. Any amount of fancy printing on a card-board would not make it a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cannot bring the carton into existence . Let us apply this above formula to the facts of this case. The product in this case is the aluminium printed label. The printing industry has brought the label into existence. That being the position and further the test of trade having understood this label as the product of printing industry, there is no difficulty in holding that the label in question are the products of printing industry. It is true that all products on which some printing is done, are not the products of printing industry. It depends upon the nature of products and other circumstances. Therefore the issue has to be decided with reference to facts of each case. A general test is neither advisable nor practicable. We are, therefore, of the opinion that the Tribunal was not right in concluding that the printed aluminium labels in question are not products of printing industry . 14.With respect, we agree with the test formulated by the Division Bench. The question is, whether the product would serve any purpose but for the printing. If the product could serve a purpose even without printing and there is no change in the commercial product after the printing is carried ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sidered what constituted manufacture . In that connection the Court observed :- 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 . The Court referred to various earlier decisions dealing with the expression manufacture . We are unable to appreciate as to how the ruling helps the Revenue in the present case. We have already pointed out that the printing on the bottles does not bring into existence a new commercial commodity which is distinct and separate in its character, use and name from the original commodity. Hence, we are unable to accept the contention of the Revenue in this case that printing on bottles involves a process of `manufacture'. 18.Learned Counsel for the assessee has also placed before us a copy of Trade Notice No. 28/1980 issued by Pune Central Excise and Customs Collectorate with reference to Tariff Item No. 23A(4). It reads thus :- Attention of the Trade is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of manufacture of the bottles but also the cost of printing charges. The Revenue cannot be permitted to levy duty twice on the same item when there is no warrant therefor in the relevant provisions of the Act. 21.In the circumstances there is no difficulty in holding that the view taken by the Appellate Tribunal in Appeal No. ED/SB 682/84-A is erroneous inasmuch as the process of printing is being carried out in a separate premises as found by the Tribunal and such process is not `manufacture' within the meaning of the Act. Consequently, Civil Appeal No. 767 of 1991 has to be and is hereby allowed. The order of the Tribunal as well as those of the Collector and Assistant Collector are set aside. The show cause notice issued by the Revenue to the appellant in Civil Appeal No. 767 of 1991 is quashed. 22.It follows that the Special Leave Petition (Civil) No. 8316 of 1994 filed by the Union of India has to be and is hereby dismissed. 23.Insofar as Civil Appeal No. 2882 of 1993 is concerned, the contention of the appellant has to be accepted on the facts of the case. It is not in dispute that the printing on the bottles is also carried out in the same factory where the bott ..... X X X X Extracts X X X X X X X X Extracts X X X X
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