TaxTMI 
TaxTMI 
1997 (12) TMI 110
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....nder Tariff Item 23 of the Central Excise Tariff. Till 1983 they were manufacturing and supplying plain glass bottles to customers. In 1983 they filed an application before the Assistant Collector, Central Excise, Saharanpur enclosing a revised layout of the factory in substitution of the existing plan. Under the revised plan, the premises in which the manufacturing operation of glass and glassware was undertaken was segregated from the premises in which the machinery for printing of glass bottles with ceramic colour was to be installed for carrying on the printing operation. The Superintendent (Central Excise) approved of the revised plan. The appellants commenced the process of printing of bottles in the separate demarcated Unit for which no Excise License was taken. The said demarcated unit is situated within a shed enclosed by walls separate from the main factory which is licensed for manufacturing glass and glassware. The Range Superintendent of Central Excise issued a directive vide letter dated 29-6-1983 that the appellants shall not remove any printed bottles without payment of Central Excise duty on the enhanced value after including the expenditure incurred on printing/de....
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....e they were entitled to get refund of the said duty. They had paid the duty on the price of the bottles as supplied to the customers as per the approved Price List No. 37 which included the printing charges. The claim for refund was accepted by the Assistant Collector of Central Excise but rejected by the Collector. The assessee filed a writ petition in the High Court of Bombay to quash the order of the Collector. A Division Bench of the High Court upheld the contention of the assessee and held that printing on the glass bottles cannot be included in the assessable value for the purpose of levy of excise duty. Aggrieved by the order of the Division Bench, the Union of India has preferred this appeal. 7.Insofar as the factual position in this appeal is concerned, there is no dispute that the entire process including the printing on the bottles is carried out in one factory and the excisable goods supplied to the customers by the respondents are the printed bottles at the price set out in the approved price list inclusive of the printing charges. 8.In Special Leave Petition No. 8316 of 1994 the first respondent is a company which undertakes the process of decorating glass bottles a....
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....terial purchased by them, the processes of neutralisation by alkali and bleaching by activated earth and/or carbon. According to the learned Counsel "manufacture" is complete as soon as by the application of one or more processes, the raw material undergoes some change. To say this is to equate "processing" to "manufacture" and for this we can find no warrant in law. The word "manufacture" used as a verb is generally understood to mean as "bringing into existence a new substance" and does not mean merely "to produce some change in a substance", however minor in consequence the change may be. This distinction is well brought about in a passage thus quoted in Vol. 26, from American judgment. The passage runs thus :- `Manufacture' implies a change, but every change is not manufacture and yet every change of an article is the result of treatment, labour and manipulation. But something more is necessary and there must be transformation; a new and different article must emerge having a distinctive name, character or use." 10.In Deputy Commissioner of Sales Tax (Law) Board of Revenue (Taxes), Ernakulam v. M/s. Pio Food Packers - 1980 (6) E.L.T. 343 (S.C.) = 1980 Supp. Supreme Court ....
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....y the major time and expense in the manufacture of the carton. It was, therefore, finally contended that the printed cartons are known and understood in the trade as the product of the printing industry. Since that is how the printed cartons are understood in the common parlance, the appellant-company is entitled to the benefit of the Exemption Notification. ..... The literature referred to by the appellant only shows that the printing industry has advanced to such an extent that one can print on almost anything such as glass, metal or synthetic base. Earlier the printing activity was primarily confined to printing of books, literature, newspaper and periodicals etc. The advanced printing industry covers a much wider field of activity than it did in the past. Can we, therefore, say that every material on which printing work is done becomes a product of the Printing Industry? The answer has to be in the negative. An ordinary carton without any printing on it is a completed product and undisputably the product of Packaging Industry. The question for our consideration is, does it cease to be the product of Packaging Industry as and when some printing is done on the said carton? We ar....
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....he above ruling was followed in Collector of Central Excise, Bombay v. Paper & Products Co. - 1996 (88) E.L.T. 317 (S.C.) in which it was held that unwaxed printed paper cut into sheets and reels according to the needs of the customer for the purpose of being used as wrappers in packaging cannot be said to be a product of printing industry so as to attract the exemption Notification. 13.In Metagraphs Pvt. Ltd. v. Collector of Central Excise, Bombay - 1996 (88) E.L.T. 630 (S.C.) = (1997) 1 S.C.C. 262 the appellant manufactured printed aluminium labels. The labels were printed on flatbed offset printing press and the printing was done on a deep offset printing plate. The labels were meant to be fixed to refrigerators, radios, air-conditioners, telephones etc. The Tribunal held that the printed aluminium labels were not products of printing industry and rejected the claim for exemption. The Division Bench of this Court reversed the decision of the Tribunal and followed the reasoning in Rollatainers Ltd.'s case (supra). After referring to the above case, the Bench said " ... There this Court approved the test based on understanding of trade parlance/common parlance of a particular....
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....ed by the respondents therein. The Bench distinguished the ruling in Metagraphs Pvt. Ltd.'s case. 16.On an analysis of the aforesaid rulings, a two-fold test emerges for deciding whether the process is that of "manufacture". First, whether by the said process a different commercial commodity comes into existence or whether the identity of the original commodity ceases to exist; secondly, whether the commodity which was already in existence will serve no purpose but for the said process. In other words, whether the commodity already in existence will be of no commercial use but for the said process. In the present case, the plain bottles are themselves commercial commodities and can be sold and used as such. By the process of printing names or logos on the bottles, the basic character of the commodity does not change. They continue to be bottles. It cannot be said that but for the process of printing, the bottles will serve no purposes or are of no commercial use. 17.Learned Counsel for the Revenue has strenously contended that the printing on the bottles will make them a different commodity known as printed bottles. According to him such printed bottles cannot be of any gener....
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....earned Counsel submits that it is not open to the Revenue to raise any contention contrary to the notice. Our attention is drawn to the judgment of this Court in Collector of Central Excise, Patna v. Usha Martin Industries - 1997 (94) E.L.T. 460 (S.C.) to which one of us (S.C. Sen) was party. It has been held in that case that Revenue cannot be permitted to take a stand contrary to the instructions issued by the Board and Departmental Circulars issued before enactment of Section 37B of Central Excise Act or thereafter, are equally binding on Revenue as the object in either case was the same namely, to achieve uniformity in the classification. Learned Counsel contends that even if the trade notice is held to be not binding on the Revenue as such, it can be used by the assessee to show that the Department has also understood the relevant expression `manufacture' in the same manner. In the present case it may not be necessary for us to rely upon the trade notice. We have already pointed out that printing on bottles will not amount to `manufacture' within the meaning of Section 2(f) of the Act. 20.It is useful to refer to the tariff description in Item No. 23A of the Central E....