Court affirms new product creation in aluminium container manufacture.

The court upheld the constitutional validity of the amendments to Section 2(f) and Tariff Item 27 of the Central Excise Act, including lacquering and printing processes in the definition of 'manufacture' for aluminium containers. It concluded that these processes result in a new product and should be considered in the assessable value for excise duty. The court's decision aligned with the Supreme Court's ruling in Empire Industries Ltd. v. Union of India, affirming that lacquering and printing on aluminium tubes constitute 'manufacture'. The writ petition challenging the amendments was dismissed.

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Issues Involved:
1. Constitutional validity of the amendment to Section 2(f) and Tariff Item 27 of the Central Excise Act.
2. Definition and scope of 'manufacture' under the Central Excise Act.
3. Applicability of the Supreme Court's decision in Empire Industries Ltd. v. Union of India.
4. Inclusion of the cost of lacquering and printing in the value of aluminium containers for excise duty purposes.

Detailed Analysis:

Issue 1: Constitutional Validity of the Amendment to Section 2(f) and Tariff Item 27
The petitioners challenged the constitutional validity of the amendments to Section 2(f) and Tariff Item 27 of the Central Excise Act, as effected by the Finance Act (2) of 1980. The amendments included the processes of lacquering and printing within the definition of 'manufacture' for aluminium containers. The court upheld the validity of these amendments, stating that the Parliament has the competency to define 'manufacture' to include any process incidental or ancillary to the completion of a manufactured product.

Issue 2: Definition and Scope of 'Manufacture' under the Central Excise Act
The court examined whether the processes of lacquering and printing on aluminium collapsible tubes and rigid cans constitute 'manufacture' under the amended Section 2(f). The court referred to the Supreme Court's decision in Empire Industries Ltd. v. Union of India, which held that processes like bleaching, dyeing, and printing on cotton fabrics constitute 'manufacture' as they bring forth a new marketable commodity. Applying this principle, the court concluded that lacquering and printing on aluminium tubes also result in a new and distinct product, thus falling within the definition of 'manufacture'.

Issue 3: Applicability of the Supreme Court's Decision in Empire Industries Ltd. v. Union of India
Both parties relied on the Supreme Court's decision in Empire Industries Ltd. v. Union of India. The court noted that the legal consequences arising from the amendments to the definition of 'manufacture' and the tariff items for cotton fabrics and aluminium products are analogous. The Supreme Court's ruling that the processes of bleaching, dyeing, and printing constitute 'manufacture' was applied to the present case, affirming that lacquering and printing on aluminium tubes also constitute 'manufacture'.

Issue 4: Inclusion of the Cost of Lacquering and Printing in the Value of Aluminium Containers for Excise Duty Purposes
The petitioners argued that the cost of lacquering and printing should not be included in the value of plain aluminium tubes for excise duty purposes. The court rejected this argument, stating that the intrinsic value of the lacquered and printed tubes, which are sold for the first time in the wholesale market, should be the basis for the levy of excise duty. The court held that the processes of lacquering and printing transform the plain aluminium tubes into a new and distinct commodity, and therefore, the value of these processes should be included in the assessable value for excise duty.

Conclusion
The court dismissed the writ petition, upholding the constitutional validity of the amendments to Section 2(f) and Tariff Item 27 of the Central Excise Act. It affirmed that the processes of lacquering and printing on aluminium tubes constitute 'manufacture' and that the value of these processes should be included in the assessable value for excise duty. The court's decision was guided by the principles laid down by the Supreme Court in Empire Industries Ltd. v. Union of India.

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