COLLECTOR OF CENTRAL EXCISE, MADRAS.versusKUTTY FLUSH DOORS & FURNITURE CO. (P) LTD.

             COLLECTOR OF CENTRAL EXCISE, MADRAS.                                   A
                              v.
           KUTTY FLUSH DOORS & FURNITURE CO. (P) LTD.

                                  MARCH 28, !988

        ISABYASACHJ MUKHARJJ AND S. RANGANATHAN, JJ.J                               B
 ')!
            Central Excises and Salt Act, 1944: Section 35L and Tariff Item
       No. 68-Timber logs sawn into sizes-Whether new product emerges--
       Whether excise duty becomes chargeable-Concept of 'manufacture'-
       What is.
-{.
             Words and Phrases: 'Manufacture'--:--Meaning of.
                                                                                    c
 ~

             The respondent firm filed a classification list before the Assistant
       Collector, Excise, and sought approval for treating sawn timber and
       dried timber as non-excisable on the ground that sawing of timber logs
       into sizes did not amount to manufacture. The Assistant Collector held       D
       that conversion of the timber logs into sawn timber satisfied the condi-
       lions of manufacture since it involved transformation, whereby a new
       and different article with the distinct name, character or use, which was
       different from the timber logs, emerged, and, therefore, excise duty
~      was leviable under Tariff Item 68. On appeal, the Collector concurred
       with the Assistant Collector. Allowing the appeal of the respondent, the     E
       Customs, Excise and Gold (Control) Appellate Tribunal held that no
       new product emerged by sawing of timber into several sizes. Hence the
       appeal by the Revenue under Section 35(L) of the Central Excises and
       Salt Act, I944.

-J.          Dismissing the appeal by the State,                                    F

             HELD: I. I Excise duty becomes chargeable only when a new and
       different article emerges having a distinct name, character and use.
       This is a question of fact depending upon the relevant material whether,
       as a result of activity, a new and different article emerges having a
       distinct name, character and use. l365B-D I                                  G

             1.2 'Manufacture' implies a cliange, but every change is not man-
       ufacture and yet every change of an article is the result of treatment,
       labour and manipulation. But something more was necessary and there
       must be transformation; a new and different article must emerge hav-
       ing a distinct name, character or use. l365E-FJ                              H
                                          363
    364                   SUPREME COURT REPORTS             I 1988] 3 S.C.R.

A         Having regard to the facts of the case, as found by the Tribunal
    which was the final fact finding authority and regard being had to the
    principles for determining the questions which were correctly applied.by
    the Tribunal, the conclusion of the Tribunal that no new product
    emerged by sawing of timber into several sizes Is unassailable. [365F-G I

B         Union of India v. Delhi Cloth General Mills, [1963] J Suppl. SCR
    586; Allenburry Engineers Pvt. Ltd. v. Ramakrishna Dalmia & Ors.,
    [1973] 2 SCR 257 and State of Orissa & Ors. v. The Titaghur Paper
    Mills Co. Ltd. & Anr., [1985] 3 SCR 26, referred to.

          CIVIL APPELLATE JURISDICTION: Civil Appeal No. 468
c
    of 1988.

         From the Order dated 7. 7 .1987 of the Customs Excise and Gold
                                                                                ,,
                                                                                '~

                                                                                 \

    (Control) Appellate Tribunal, New Delhi in Appeal No. 383/83-D.

        G. Ramaswami, Additional Solicitor General, Ms. Indu Malho-
D tra and Mrs. Sushma Suri, for the Appellant.

          The Judgment of the Court was delivered by

        SABYASA CHI MUKHARJI, J. This is an appeal under Section
  35L(b) of the Central Excise and Salt Act, 1944 (hereinafter called 'the
E Act'). The appeal is directed against the Order of the Customs Excise
  and ·Gold (Control) Appellate Tribunal (hereinafter called 'the
  CEGAT').

          The respondent herein filed a classification list on 16th March,
  19b8l 2 sTheekingbappr?val offhSawn timdber and dnh· ed timbber as non-excis - \
F a e.       e su m1ss1on o t e respon ent wast at t1m er 1ogs were on1y ~
  sawn into sizes and these did not tantamount to any manufacture ..
  However, the Assistant Collector, Madras, held that the conversion of
  timber' logs into sawn timber satisfied the conditions of manufacture
  insofar as the conversion of timber logs into sawn timber involves
  transformation whereby a new and different article with the distinct
G name, character or use emerges which is different from timber logs. It
  was held accordingly that excise duty @ 8% ad valorem under Tariff
  Item 68 of the erstwhile Central Excise Tariff was leviable.

       The respondent filed an appeal before the Collector of Appeals
  who concurred with the Assistant Collector upholding the duty.
H Aggriev~d thereby the respondent filed an appeal before the CEGAT.
        I
        COLLECTOR OF C.E. v. KUTI'Y FURNITURE [MUKHARJI, J.[                  365

        The Tribunal in the Judgment under appeal, relied on its decision in         A
        the case of Sanghvi Enterprises, Jammu, Tawi v. Collector of Central
        Excise, Chandigarh, 11984] Vol. 16 ELT 317 and the Kamataka High
        Court in the case of Y. Moideen Kunhi & Ors. v. Collector of Central
        Excise, Bangalore & Ors.,· 11986] Vol. 23 ELT 293 and came to the
        conclusion that no new product emerges by sawing of timber into
                                                                                     B
        several sizes. In the premises the Tribunal allowed the appeal of the
        respondent. Hence, this appeal.                                   ·

               It is well-settled that excise-duty becomes chargeable only when
         a new and different article emerges having a distinct name, character
         and use. See in this connection the observations of this Court"in Union
         of India v. Delhi Cloth & General Mills, 11963] 1 Suppl. SCR 586 and        c
         South Bihar Sugar Mills Ltd. etc. v. Union of India & Ors., 11968] 3
         SCR 21. This principle is well-settled. This is a question of fact de-
         pending upon the relevant materiai whether as a result of activity, a
         new and different article emerges having a distinc.t name, character
         and use. The use of expression 'manufacture' was explained in the case
                                                                                     D
         of Allenburry Engineers Pvt. Ltd. v. Ramakrishna Dalmia & Ors.,
         I1973] 2 SCR 257. In State of Orissa & Ors. v. The Titaghur Paper Mills
         Co. Ltd. & Anr., .11985] 3 SCR 26 which was a decision on the Orissa
         Sales Tax Act, this question was considered in the background of the
       · fact whether planks, cut into sizes, etc., sawed out of logs, are diffe-
         rent from logs in its nascent state.
                                                                                     E
              It may be worthwhile to note that '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 was necessary and there must be transformation; a
        new and different article must emerge having a distinct name, charac-
        ter or use. See Union of India v. Delhi Cloth Mills (supra) at page 596      F
        of the report. Having regard to the facts found in this case by the
        Tribunal, which ultimately is the finaJ fact finding authority, we are of
        the opinion that regard being had to the principles for detqrmining the
        questions which were correctly applied in the decision of th~ Tribunal,
        in the facts of this case, the conclusion of the Tribunal is unassailable.
                                                                                     G

··~.         In the premises there is no merit in this appeal and the same is
        accordingly dismissed.

        N.P.V.                                                 Appeal dismissed.