Sugar Mill Roller Regrooving Not Manufacturing: Tribunal Rules in Favor of Ugar Sugar Works

The Tribunal held that regrooving and grooving of reshelled sugar mill rollers does not amount to manufacturing under the Central Excises Act. Relying on legal precedents, including judgments from the Punjab and Haryana High Court and the Bombay High Court, the Tribunal determined that these activities do not create a new commercial commodity but rather recondition old rollers. Consequently, the order classifying the process as manufacturing was set aside, and the appeal by M/s. Ugar Sugar Works Ltd. was allowed.

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Issues:
Whether regrooving of sugar mill rollers and grooving of re-shelled mill rollers amount to manufactureRs.

Analysis:
The case involves an appeal by M/s. Ugar Sugar Works Ltd., Ugarkhurd, Karnataka, against the order of the Collector of Central Excise (Appeals), Madras, regarding the classification of regrooving and grooving activities under Tariff Item 68 as manufacturing. The appellant argued that the process does not amount to manufacturing and cited relevant judgments to support their claim. The respondent contended that regrooving and grooving constitute a complete process of manufacture, referencing a Tribunal judgment to strengthen their position.

The Tribunal, after considering the arguments and facts presented, examined the process of reshelling and grooving of old sugar mill rollers. The Tribunal referred to the Punjab and Haryana High Court judgment in Saraswati Industrial Syndicate Ltd. v. Union of India, which highlighted that the process of reshelling and grooving does not result in the emergence of a new or distinct article, but rather reconditions the old roller into a usable form. The Tribunal emphasized that the appellant does not receive shafts for manufacturing but reconditions worn-out rollers, indicating no new commercial commodity is created.

Moreover, the Tribunal referred to the Bombay High Court case of Century Spinning and Manufacturing Company Ltd. v. Union of India, which established that mere repair or reconditioning of worn-out products does not amount to manufacturing liable for excise duty. Additionally, the Tribunal cited the Supreme Court's observations in Lathia Industrial Supplies Co. Pvt. Ltd. v. Collector of Central Excise, Baroda, supporting the appellant's stance that no manufacturing activity occurs during the grooving process.

Based on the detailed analysis and legal precedents cited, the Tribunal concluded that the grooving of reshelled sugar mill rollers does not constitute manufacturing as per the Central Excises Act. Therefore, the impugned order classifying the activity as manufacture was set aside, and the appeal by M/s. Ugar Sugar Works Ltd. was allowed. The revenue authorities were directed to give effect to the Tribunal's decision accordingly.

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