1981 (8) TMI 218

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....T.I. 68, such as "Rubber Diaphragms and Rubber Bushes", etc; (3) To carry out Rubberlining job on vessels belonging to customers. (4) Or to supply vessels and equipments in complete state i.e. fitted with Rubberlinings etc. 2. They claimed exemption under Notification 176/77-CE, dated 18-6-1977, but the same has been rejected by the Asstt. Collector of Central Excise, Bombay Div. "L", Bombay on the ground that the value of the goods including the value of tanks, vessels, etc. supplied by the customer for rubberlining had exceeded the limit of Rs. 30 lakhs. 3. Being aggrieved, the appellants have come up in appeal with a request to issue directives to the effect that- (1) The tanks, vessels brought by ....

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....cation reported to have been issued by Collector of Central Excise, Bombay-II under his letter F. No. V-68(30)150/80 Bom-II, dated 27-4-1981, wherein it is stated that "re-coating of old and used rubber/cobinite rollers and re-rubberlining of old and used vessels and pipes etc. will not amount to manufacture". The appellants have also cited following decisions in support : (A) Mere application of liquid gold on the outer surface of plain bangles so as to convert them into ornamented bangles does not amount to manufacture of a new product [Swan Bangles Store v. Asstt. S.T.O. (1970) 25 S.T.C. 122 (All)]. (B) The activity of the repairing carried out on a existing article does not amount to manufacture as by repairing, no new c....

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....ot have the process of rubberlining in their own units, they sent to others for the said purpose. Therefore, it would not be incorrect to hold that the process of rubberlining in such cases is a process of incidental or ancillary to the completion of a manufacture product, namely, rubberlined tanks/vessels. Accordingly, the process of rubberlining in such cases amount to manufacture within the meaning of Section 2(f) of the Central Excises and Salt Act, 1944 and the appellants must pay duty on the job charges collected by them, vide notification No. 119/75-CE, dated 30-4-1975, then in force curing the material period, but for the purpose of valuation under Notification 176/77 not only the value of job charges but also the value of tanks/ves....