1968 (12) TMI 30

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....are. These manufactured goods were free from all excise duties by the Finance Act, 1961, for the first time these goods were incorporated under the First Schedule of the Act for levying and collection of excise duties. The excise duties were imposed from the date when the Finance Act came into force, that is, from April 20, 1961. According to the direction given by certain Excise Officers the petitioner made a declaration of the existing goods as it stood on the mid-night of February 28, 1961 and 1st March, 1961 in the prescribed form. The petitioners were informed that goods which remained unsold up to January 25, 1962 would be liable for duty with effect from January 25, 1962 although, they are lying in stock for delivery since February 2....

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.... only question, therefore, that arises for consideration in these cases is whether packing is a process incidental or ancillary to the completion of manufactured product. It is undisputed that the excise duty is leviable on all excisable goods under Section 3 of the Act which are produced and manufactured. The word `manufacture' has been defined under Section 2(f) which includes any process incidental or ancillary to the completion of all manufactured product. It also includes in relation to Tobacco and Salt and several other components or products as enumerated in sub-clauses (i) and (ii) of said clause (f) with which I am not concerned. The word `manufacture' on the basis of this definition under the Act has been explained by the Supreme ....

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....t' unless they were packed and made ready for delivery to the customers. The only answer, in my opinion, is in the negative. Packing cannot be equated with possessing or treated as ancillary to the completion of the manufactured goods on completion of which alone it may be said that the goods are said to be manufactured `in the sense of bringing into existence a new substance known to the market and liable of duty'. For, cases may be visualised where China and procelainwares, glass or glasswares may be delivered to the customers even in wholesale without packing. It is true in usual course of commercial practice these goods are packed by the manufacturer for delivery to the customers but that fact by itself cannot constitute such packing in....