Assembly of prescription lenses into frames not 'manufacture' under Central Excise Act. Legal flaws in SCNs quashed.

The Court held that the assembly of prescription lenses into spectacle frames does not amount to 'manufacture' under the Central Excise Act, 1944. Show Cause Notices (SCNs) issued without considering established legal principles were deemed legally flawed, leading to the quashing of the SCNs. The Court emphasized that despite involving skilled processes, the mere assembly of lenses and frames does not create a new product. Consequently, the writ petitions were allowed, and all related miscellaneous petitions were closed without costs.

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Issues Involved:
1. Liability to remit excise duty on fixing prescription lenses in spectacle frames.
2. Issuance and validity of Show Cause Notices (SCNs).
3. Whether the assembly of prescription lenses onto spectacle frames constitutes 'manufacture' under the Central Excise Act, 1944.

Detailed Analysis:

1. Liability to Remit Excise Duty on Fixing Prescription Lenses in Spectacle Frames:
The core question was whether the activity of fixing prescription lenses into spectacle frames amounts to 'manufacture' under the Central Excise Act, 1944, which would make it liable for excise duty. The Court referenced the Supreme Court decision in Assistant Commercial Tax Officer Vs. Mehta Opticians, which held that fitting lenses into frames does not constitute manufacturing as no new commodity emerges from this process.

2. Issuance and Validity of Show Cause Notices (SCNs):
SCNs were issued to multiple stores, including Titan Eye+ and Premier Optical Pvt. Ltd., alleging liability for excise duty on the assembly of spectacles. The petitioner argued that these notices were issued without considering binding judicial precedents, specifically the Supreme Court's decision in Mehta Opticians. The Court noted that the issuance of SCNs without considering established legal principles constitutes a jurisdictional flaw, rendering the proceedings legally untenable.

3. Whether Assembly Constitutes 'Manufacture':
The Court examined whether assembling prescription lenses with spectacle frames constitutes 'manufacture.' It referred to the Calcutta High Court's decision in Bholanath Sreemany, which held that such assembly does not transform the components into a new and distinct article. The Court also considered the Authority for Advance Rulings' decision in Amazon Seller Services, which supported the view that fitting lenses into frames does not amount to manufacturing. The Court concluded that despite the sophisticated processes involved, the mere assembly of lenses and frames does not result in 'manufacture' under the Act.

Additional Considerations:
The Court also addressed the procedural aspects, noting the necessity for Revenue authorities to consider settled law before issuing SCNs, as emphasized in Hindustan Poles Corporation V. CCE. The Court underscored that the assembly of lenses and frames, even if involving skilled processes, does not equate to manufacturing a new product.

Conclusion:
The Court quashed the SCNs, holding that the assembly of prescription lenses into spectacle frames does not constitute 'manufacture' under the Central Excise Act, 1944. The writ petitions were allowed, and all connected miscellaneous petitions were closed without costs.

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