Ctbd Final

7/29/2019 Ctbd Final

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Manufacture-Definition &CasesBy:Anshul GargPrateek TayalShailender ChauhanVinit Singh


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DefinitionAs per Section 2(f), Manufacture includes:

Incidental or ancillary to the completion ofmanufactured product,

Which is specified in relation to any goodsin the Section or chapter notes of the First

Schedule to CETA as amounting tomanufacture, or


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Contd Which, in relation to the goods specified inthe Third Schedule of CETA, includes:

Packing or repacking of such goods in a unitcontainer.Labeling or re-labeling of containers.Including the declaration or alteration of retailsale price on it.Adoption of any other treatment on goods torender product marketable to consumer.


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Manufacturing or not..??Check whether labeling and brandingamounts to manufacturers.

Understand deemed manufactureCheck whether mere mention in tariff isenough to levy duty.Check whether Waste & Scrap is liable toduty.Understand the meaning of the wordProduced Check whether assemble amounts tomanufacture.


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Case 1

Commissioner of Central Excise, Mumbai VS M/s Tikitar industries

Date: 22.04.2010


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HighlightsAppellant: Comm. of CE, MumbaiRespondent: M/s Tikitar Industries & Anr.Issue: Whether the conversion of `StraightGrade Bitumen' not `Blown GradeBitumen' amounts to manufacture or not.


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Contd The process of converting straight gradebitumen into blown grade bitumenthrough Oxidation is known as blowingprocess, does not amount tomanufacture and therefore, exemptedfrom payment of Excise duty.

Hence, the appeal was rejected and theproduct remained duty free.


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Case 2

M/s Usha (I) Ltd. VS Commissioner of Excise Duty, New Delhi

Date: 13.01.2011


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HighlightsAppellant: M/s Usha (I) Ltd.Respondent: Comm. of CE, New DelhiIssue: Manufactured machinery in thenature of testing equipment to test thefinal products of the assesse should beexcisable or not.


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Contd A show cause notice was issued by therespondent before.

Rejected the show cause notice.Undertaken such manufacturing processof the testing equipments to avoidimporting of such equipments from thedeveloped countries with a view to saveforeign exchange. This shows that testingequipment was saleable and marketable.


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Contd Knowledge of manufacture came to thedepartment only subsequently and in

view of non-disclosure of such informationby the appellant and suppression ofrelevant facts, the extended period oflimitation was rightly invoked by thedepartment.Hence, the appeal was dismissed by thecourt and Usha (I) Ltd. had to pay excisetax with penalty.


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Case 3

M/s Air Liquide North IndiaPvt. Ltd. VS Commissioner of Central Excise,

Jaipur-I Date: 30.08.2011


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HighlightsAppellant: M/s Air Liquide India Pvt. Ltd.Respondent: Comm. of CE, Jaipur IIssue: Treatment given or the processundertaken by the appellant to Heliumgas purchased by it from the openmarket would amount to manufacture,rendering the goods liable to duty.


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Contd The gas after the tests and treatment wassold at profit of 40% to 60%.

Different cylinders were given separatecertificates with regard to the pressure,moisture, purification and quality of thegas.The gas in cylinders was sold to consumerswhich makes it marketable.Hence the appeal was dismissed.


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Case 4

Commissioner. of Central

Excise, Meerut-II VS M/s. Sundstrand Forms Pvt.Ltd.

Date: 30.08.2011


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IssueRespondent is a firm engaged in themanufacture of computer stationery,business forms, etc., which falls sub-

Heading Nos. 4901.90 and 4820.00 under the Tariff Act,1985 hence nil rate of exciseduty.But the appellant allegedly engaged in

evasion of excise duty on carbonlesspaper which emerged at theintermediate stage during the course ofmanufacture.


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HighlightsThe company was claiming that they useto manufacture the carbonless paper which emerged at the intermediate stagebut on examination it was found that thecompany use to purchase the materialfrom the market.

Hence the decision went into the favor ofthe appellant and fine was imposed on thecompany for evasion of tax.


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LearningsUnder which particular heading theintermediary product would fall or is it tobe treated as a final or end product,under heading 4820.00 of the Schedule tothe Central Excise Tariff Act.Whether or not the intermediary product

in question has a marketability prospectand capability.


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Case 5

Commissioner of Central ExciseVsKapri International (P) Ltd.

Date: 2002


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HighlightsAppellant :- Kapri International (P) Ltd.Respondent :- Commissioner of CentralExciseIssue:- The issue before the Tribunal was thequestion of dutiabality of the productsmade from duty paid cotton fabrics. Held :When there is a change of identity due tothe fabrics being subjected to a process ofcutting resulting in a totally new marketable

product having a distinct new marketidentity the said process is manufacturinghence the same becomes dutiable. Appealallowed.


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HighlightsJudgment :- Merely because duty has beenlevied on the material from which the newgoods are manufactured, the finishedproduct would not be excluded from thelevy of fresh duty if the Tariff Act so provides.Duty was imposed on the cotton fabricunder Tariff Item 19(I) and the Tariff Act hasmade bed sheets, pillow covers, napkins etc.

subject to duty under the same Tariff item.Therefore, the respondent was liable to payduty on bed sheets etc. manufactured byhim.


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Case 6

COMMISSIONER OF CENTRALEXCISE,

Vs M/S GURUKRIPA RESINS PVT. LTDDATE: 2007


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HighlightsAPPELLANT:- COMMISSIONER OF CENTRALEXCISE, NAGPUR

RESPONDENT:- M/S GURUKRIPA RESINS PVT.LTD.Issue:- whether or not the process of lifting ofwater with the use of power, to the extentand for the purpose mentioned above,

constitutes a process in or in relation tomanufacture of goods, viz. Rosin andTurpentine Oil, with the aid of power?


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HighlightsJudgment :- It was thus, argued that water being an integral part of the manufacturing

process, which would include all stages andall processes which are necessary for the finalproduct, its lifting to the overhead tank is aprocess in relation to the manufacture of thefinal product and since that process requiringthe aid of power is integrally connected withthe manufacture, the assessee is not entitledto exemption from duty


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Case 7

M/s. Royal Enfield (Unit of M/s.Eicher Ltd.) VS Commissioner of Central Excise, Chennai

Date: March 17, 2011.


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HighlightsAppellant: M/s. Royal Enfield (Unit of M/s.Eicher Ltd.)Respondent: Commissioner of Central Excise,

ChennaiIssue: Issue that arises for our consideration inthe present case is as to whether the cost ofpacking charges expended/incurred by theappellant-company is liable to be included in

the assessable value of the motorcyclesmanufactured by the appellant-company .


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Case 8

Commercial Taxes Officer VS M/s. Jalani Enterprises

Date: March 17, 2011.


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HighlightsAppellant: Commercial Taxes Officer Respondent: M/s. Jalani Enterprises

Issue: The issue which falls for our consideration is as to whether Jaljira which isa product manufactured by the respondentherein is only an appetizer and is not amasala and therefore liable to sales tax at therate of 10% and not 16%. According to the

High Court Jaljira would fall in the residuaryclause and therefore tax should be levied atthe rate of 10% and not 16%.


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HighlightsJudgement: The judgment and order passed by the 11 High Court is set aside.


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THANK YOU..!!

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