Narne Tulaman Manufactures Pvt. Ltd. Hyderabad v. Collector of Central Excise, Hyderabad

SAJIYASACHI MUKliARJI, J. These are appeals under section 35L of the Central Excises and Salt Act, 1944 (hereinafter called 'the Act') arise from the decision of the Customs, Excise and Gold (Control) Appellate Tribunal {CEGAT for short), New D~lhi. The F question that fell for consideration by the Tribunal is whether the appellant M/s. Name Tulaman Manufacturers Pvt. Ltd. manufactured weighbridge~ and as such was liable to duty under the Act. It appears that weighbridges consisted of three different parts, namely, (1) Platform, (2) Load Cells and (3) Indicating system. The b contention of the appellant was that he got the platform manufactured from other people. The load cells were imported and the appellant only made the indicator system. In other words, it was the case of the appellant that it manufactured only the indicator system. The ques­ tion, that fell 'for the Tribunal's determination is whether the activity indisputably c.arried out by the appellant amounted to manufacture ff and what does it manufacture? It has been found that "the appellant .. -· N.T. MFRS. v . .COLLECTOROFCENTRALEXCISE [MUKHARJl,J.) 3 brought the three components together at site, fitted and assembled them together so that they can work as one machine and as such the appellant manufactured and created a new weigbbridge". The afore­ said findings appear in paragraph 5 of the Tribunal's order. That weighbridge had not been excised before is not disputed. The term of the central excise speaks of "weighbridge"; wheneve1 weighbridges are made, those weighbridges are subjected to duty as such. The Tribunal held that by whatever process it became a complete weigh­ bridge as long as a weighbridge has been made and completed, duty has to be paid. According to the Tribunal, though the parts are themselves liable to excise duty and so the complete machine is also a new excisable good. In view of the well-settled principles, the excisable goods are manfactured by the appellant. Section 2(f) of the Act provides an inclusive definition and states that the word "manufacture" includes any process incidental or ancillary to the com­ pletion of a manufactured product. So any process by which an object becomes new commercial goods, including any process incidental or ancillary to the completion would be manufacture. Manufacture means bringing into existence new goods. This Court observed in Union of India v. Delhi Cloth Mills, [1963] Suppl. 1 S.C.R. 586 that 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 and different article must emerge having a dis­ tinctive name, character or use. The question, therefore, is whether the activity carried out by the appellant of assembling the three compo­ nents of the weighbridge brings into being complete weighbridge which was a distinctive name, characte.r or use. See also the observa­ tions of this Court in Allenburry Engineers (p) Ltd. v. Ramakrishna Dalmia & Ors., [1973] 2 S.C.R. 257 and Jdandas v. Ananat Ramchandra Phadke, [1981] 3 Scale 1790. The appellant's contention before the Tribunal was that it was only preparing a part and that part is dutiable as a separate part. The appellant, however, did the work of assembling. As a result of the work of the appellant a new product known in the market and known under the excise item "weighbridge" comes into being. The appellant will become a manufacturer of that product and as such liable to duty. That is precisely what the Tribunal found on the facts of the case. The appellant seems to have been obsessed by the idea that as a part of machine is liable to duty t.hen the whole end product should not be dutiable as separate excise goods. That is mistake, a part may be goods as known in the excise laws and may be dutiable. The appellant in this A case claims to have manufactured only the indicator system. If the indicator system is a separate part and a duty had been paid on it and if the rules so provide then the appellant may be entitled to abatement under the rules. But if the end product is a separate product which comes into being as a result of the endeavour and activity of the B appellant then the appellant must be held to have manufactured the said item. When parts and the end product are separate_ly dutiable­ both are taxable. In that view of the matter, the appellant's case that it is liable only for the component part and not the end product cannot be entertained. The Tribunal was, therefore, right in the view it took. C These appeals have no merit and are accordingly dismissed. This order will not preiudice the rights of the appellant to claim, if any, abate­ ment as indicated before according to the rules if the appellant is so entitled. R.S.S. Appeals dismissed. ... / '