1984 (2) TMI 99

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....nt, after assembling the panels from the parts supplied by the 1st petitioner, sends the panels to the 1st petitioner. Thereafter, the 1st petitioner, using the panels and various parts supplied by the 2nd petitioner, assembles the radios. 2. On 2nd July 1977 a notification was issued under Rule 8 of the Central Excise Rules, 1944, exempting radios falling under Item 33A(2) of the First Schedule to the Central Excises and Salt Act, 1944, of a value not exceeding Rs. 165/- per set from the whole of the excise duty leviable thereon. The proviso thereof reads thus : "Provided that the sets are manufactured in an Industrial Unit in respect of which an officer not below the rank of an Assistant Collector of Central Excise is satisfied that....

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....d not be rejected. On 3rd May 1980 the 1st petitioner's attorneys showed cause and submitted that the radios came into existence for the first time in its unit as a result of manufacture by it. 5. On 8th August 1980 the 1st respondent rejected the petitioner's claim for exemption. He found that the 1st petitioner had the status of a contractor, and the manufacturer within the meaning of Section 2(F) would be the 2nd petitioner. This was an irrelevant point because the exemption went with the radios manufactured provided the conditions laid down by the said notification were fulfilled. It was not material whether the 1st petitioner or the 2nd petitioner was the manufacturer. From the facts it was seen that the 1st petitioner got an import....

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....o of the 3rd respondent. Hence, the 1st petitioner did not satisfy the condition of the said notification. Since the manufacture of the radios was done by two units, it could not be said that the radios were completely manufactured in the premises of the 1st petitioner. 10. I shall deal with the order dated 8th August 1980 first. 'Manufacture' has been defined by the Supreme Court in Union of India v. Delhi Cloth & General Mills, 1977 E.L.T. (J 199) = A.I.R. 1963 S.C. 791, to mean the bringing in to existence of a new substance. The Supreme Court observed that it did not mean merely the production of some change in a substance. The observation in an American judgment was approved, namely, that 'manufacture' implied a change, but every ch....