TaxTMI 
TaxTMI 
2002 (8) TMI 131
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....lowing the earlier order in the case of the same applicant, the Tribunal, on 17th April, 1998 [1998 (102) E.L.T. 387 (Tri.)], upheld the order passed by the Commissioner (Appeals). In the meantime, in regard to the earlier order Court, on 1st July, 1997, had directed the Tribunal to refer questions of law to this Court for opinion. Accordingly, the following questions of law have been referred to this Court for opinion : 1. "Whether, in the circumstances of the present case, facts of which are not in dispute, duties paid on material, namely, plastic films/poly paper used for testing machines for forming commercial/technical opinion as to their marketability/excisability would be eligible to be taken as credits under Rule 57A read with relevant notification?" 2. "Whether such use of material in testing in view of the purposes mentioned above, could be said to be 'use in the manufacture of' or use in relation to the manufacture of the final products viz., Machines as assembled?" 2.Heard Shri A.P. Mathur, learned Counsel for the applicant and Shri S.P. Kesharwani, learned Standing Counsel for the respondent. Both the parties have also submitted their written note of submissio....
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....rred to as the 'final products') as the Central Government may, by notification in the Official Gazette, specify in this behalf, for the purpose of allowing credit of any duty of excise or the additional duty under Section 3 of the Customs Tariff Act, 1975 (51 of 1975), as may be specified in the said notification (hereinafter referred to as the 'specified duty') paid on the goods used in or in relation to the manufacture of the said final products (hereinafter referred to as the 'inputs') and for utilizing the credit so allowed towards payment of duty of excise leviable on the final products, whether under the Act or under any other Act, as may be specified in the said notification, subject to the provisions of this section and the conditions and restrictions that may be specified in the Notification : Provided that the Central Government may specify the goods or classes of goods in respect of which the credit of specified duty may be restricted. Explanation. — For the purpose of this rule, 'inputs' includes — (a) inputs which were manufactured and used within the factory or production in or in relation to the manufacture of f....
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....xcise Act, 1944 and has submitted that "manufacture" includes any process— (i) incidental or ancillary to the completion of a manufacture product; and (ii) which is specified in relation to any goods in this section or Chapter Notes of the Schedule to the Central Excise Tariff Act, 1985. 10.It is the contention of the learned Counsel for the applicant that the applicant is engaged in the manufacture of Automatic Form Fill and Sealing Machines, which are used by the purchasers for packing and sealing their products in plastic pouches. Before the machine is ready to be marketed and can be said to be finally manufactured, the applicant has to use Laminated Plastic Films/Poly Paper for the purpose of testing, tuning and adjusting various parts of the machine so as to ensure that they are fit and ready for packing and sealing the required size of pouches. It is the case of the applicant that the purchasers place their orders to the applicant mentioning the specifications of the pouches, which they require for packing and sealing their products. Unless and until tuning and adjustment is d....
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....; 1989 (43) E.L.T. 201 (S.C.), Collector of Central Excise v. Eastend Paper Industries Ltd. 4. 1996 (88) E.L.T. 273 (Tribunal), Machine Fabrik Polygraph (I) Ltd. v. Collector of Central Excise, Pune. 5. 1996 (83) E.L.T. 117 (Tribunal), Walchandnagar Industries Ltd. v. Collector of Central Excise, Pune/Bombay. 6. 2000 (120) E.L.T. 105 (Tribunal), Collector of Central Excise, Surat v. Kolsite Maschine Fabrik Ltd. 13.It is also the contention of the learned Counsel that the expression "in or in relation to the manufacture'' used in Rule 57A is a term of extremely wide import and it does not admit of any exclusion on the basis of the stage of production or whether the inputs have been used interior or posterior to manufacture. If the use of inputs has nexus to the manufacture, that would suffice. However, in the instant case, the applicant has used the inputs, in question, in the course of manufacture itself for the purposes of tuning, adjusting and finishing the machine so as to make it in confor....
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....pages 100 and 101 of the paper book and under the column Inspection/trial the contractual obligation is written, which is reproduced below : "Inspection/Trial will be carried out at your works in the presence of our Engineer before despatch of equipment for the performance of the machine." 16.In fact, it is the contention of the learned Counsel for the applicant that the purchase order and the condition as aforementioned have been relied upon by him and he urged that the plastic films/poly papers used for testing the performance amounts to process of manufacture and, therefore, in an input. Learned Counsel for the respondent has, however, submitted before us that a bare perusal of the conditions clearly shows that the aforesaid argument is misconceived. 17.Learned Counsel for the respondent has relied upon Section 2(f) of the Central Excise Act, 1944, which defines the term "manufacture" and submitted that the word "manufacture" shall be construed accordingly and shall include not only a person who employs hired labour in the production or manufacture of excisable goods, but also a person, who engages in the production or manufacture, on his own account. Learned Counsel fo....
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....ed in wrapping of paper is to be treatred as raw material or component part for other variety of paper which is wrapped. Accordingly, it was held that wrapping paper, so consumed or utilized, would be entitled to exemption under Notification No. 18-A/83-C.E. In that view of the situation, wrapping paper should be treated as raw material. Manufacture in the sense it is used in the Excise law, was not complete until and unless wrapping was done. It is settled law that excise is a duty on manufacture. Manufacture is the process or activity, which brings into existence new, identifiable and distinct goods. Goods have been understood to be articles known as identifiable articles known in the market as goods and marketed or marketable in the market as such. This view finds support from the decisions of the Supreme Court in Bhor Industries Ltd., Bombay v. Collector of Central Excise, Bombay, 1989 (40) E.L.T. 280 (S.C.) = 1989 (1) S.C.C. 602; South Bihar Sugar Mills Ltd. Etc. v. Union of India and Others, 1978 (2) E.L.T. (J 336) (S.C.) = 1968 (3) S.C.R. 21; Union of India v. Delhi Cloth and General Mills Ltd., 1977 (1) E.L.T. (J 199) (S.C.) = 1963 Supp. 1 S.C.R. 586; Union Carbide India Lt....
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....hed goods would qualify under Rule 13, but not spinning machinery, without which the business cannot be carried on". The judgment and decision in the case of Collector of Central Excise v. Jay Engineering Works Ltd., reported in 1989 (39) E.L.T. 169 (S.C.) may also be taken note of. In the aforesaid case before the Supreme Court, the respondent was a manufacturer of electric fans and brought into its factory nameplates under Tariff Item 68 of the erstwhile Central Excise Tariff. The nameplates were affixed to the fans before marketing them. The respondent claimed the benefit of proforma credit in terms of Notification No. 20-I/79, dated 4th June, 1979, which was for the purpose of relief on the duty of excise paid on goods falling under Tariff Item 68, when these goods were used in the manufacture of other excisable goods. The said notification stated that in supersession of the Notification No. 178/77 of the Central Excise dated 18th June, 1977, all excisable goods on which duty of excise was leviable and in the manufacture of which any goods falling under Item No. 68 have been used, were exempted from so much of the duty of excise leviable thereon as was equivalent to the duty of....