NARNE TULAMAN MANUFACTURES PVT. LTD. HYDERABADversusCOLLECTOR OF CENTRAL EXCISE, HYDERABAD

          NARNE TULAMAN MANUFACTURES PVT. LTD.
                                                                               1,A
                       HYDERABAD
                           v.
         COLLECTOR OF CENTRAL EXCISE, HYDERABAD

                            SEPTEMBER 15, 1988
                                                                               B
                [SABYASACHI MUKHARJI, M.H. KANIA
                    AND S. RANGANATHAN, JJ.]
..        Central Excises and Salt Act, 1944: Section 2(f)-'Manufacture'
     means bringing into existence new goods-When parts and end pro.duct
     separately dutiable-Both taxable.
                                                                                c
           The appellant manufactured one of the three parts, i.e., Indicat-
     ing system, required for the manufacture of weighbridges, and after
     procuring the other two parts brought the three components together
     at site, fitted and assembled them together and thus created a new
     weighbridge. The appellant challenged the excise duty levied on the        D
     manufacture of weighbridges under the Central Excises and Salt Act,
.J
     1944.

           The appellant's contention before the Customs, Excise and Gold
     (Control) Appellate Tribunal .was that it was preparing only.a part of
     the weighbridge which was dutiable as a separate part, and that as a       E
     part of machine was liable to duty then the whole end product should
     not be dutiable as separate excise goods. The Tribunal held that by
     whatever process it became a complete weighbridge, as long as a
     weighbridge had been made and completed, duty had to be paid.
     According to the Tribunal, though the parts were themselves liable to
     excise duty, the complete machine was also a new excisable Commodity.      F
~         Dismissing the appeal, it was,

           HELD: (1) Section 2(1) of the Act provides an inclusive definition
     and states that the word "manufacture" includes any process inciden-
     tal or ancillary to the completion of a manufactured product. So any G
     p~ by whkh an object becomes new commercial Commodity, including
     a11y process incidental or ancillary to the completion, would. be
     manufacture. [3C]

          (2) Manufacture means bringing into existence new goods. There
 J
     must be transformation and a new and differ~nt article must emerge H
                                           l
    2          SUPREME COURT REPORTS                 [1Q88] Supp. 3 S.C.R.

A   having a distinctive name, character or use. [3D-E]

          Union of India v. Delhi Cloth Mills, [1%3] Suppl. 1 S.C.R. 5116;
    Allenburry Engineers (p) Ltd. v. Ramakrishna Dalmia, [1973] 2 S.C.R.
    257 and Idandas v. Anant Ramchandra Phadke, [1981] 3 Scale 1790,
    referred to.

          (3) If the end product is a separate product which comes into
    being as a result of the endeavour and activity of the appellant, then the
    appellant must be held to have manufactured the said item. When parts
    and the end product are separately dutiable-both are taxable. [4A-BI         ..
          CIVIL APPELLATE JURISDICTION: Civil Appeal Nos.
C 1335-36 of 1987.                                   '

         From the Judgment and Order dated 3.10.1986 of the Customs
    Excise .and' Gold (Control) Appellate Tribunal New Delhi in Appeal
    No. E 1568 & 1569/81-Bl in Order No. 673/86-BI.
D
          A.S. Nambiar and B. Parthasarthi for the Appellant.

         Kuldip Singh, Additional Solicitor General, A.K. Srivastava
    and Mrs. Sushma Suri for the Respondents.

E         The Judgment of the Court was delivered by

        SAJIYASACHI MUKliARJI, J. These are appeals under section
  35L of the Central Excises and Salt Act, 1944 (hereinafter called 'the
  Act') arise from the decision of the Customs, Excise and Gold
  (Control) Appellate Tribunal {CEGAT for short), New D~lhi. The
F question that fell for consideration by the Tribunal is whether the
  appellant M/s. Name Tulaman Manufacturers Pvt. Ltd. manufactured
  weighbridge~ and as such was liable to duty under the Act.


         It appears that weighbridges consisted of three different parts,
   namely, (1) Platform, (2) Load Cells and (3) Indicating system. The
b contention of the appellant was that he got the platform manufactured
   from other people. The load cells were imported and the appellant
   only made the indicator system. In other words, it was the case of the
   appellant that it manufactured only the indicator system. The ques-
   tion, that fell 'for the Tribunal's determination is whether the activity
   indisputably c.arried out by the appellant amounted to manufacture
ff and what does it manufacture? It has been found that "the appellant
           N.T. MFRS. v..COLLECTOROFCENTRALEXCISE [MUKHARJl,J.)             3

     brought the three components together at site, fitted and assembled
                                                                                 A
     them together so that they can work as one machine and as such the
     appellant manufactured and created a new weigbbridge". The afore-
     said findings appear in paragraph 5 of the Tribunal's order. That
     weighbridge had not been excised before is not disputed. The term of
     the central excise speaks of "weighbridge"; wheneve1 weighbridges
     are made, those weighbridges are subjected to duty as such. The             B
     Tribunal held that by whatever process it became a complete weigh-
     bridge as long as a weighbridge has been made and completed, duty
     has to be paid. According to the Tribunal, though the parts are
     themselves liable to excise duty and so the complete machine is also
     a new excisable good. In view of the well-settled principles, the
     excisable goods are manfactured by the appellant. Section 2(f) of the
     Act provides an inclusive definition and states that the word               c
      "manufacture" includes any process incidental or ancillary to the com-
     pletion of a manufactured product. So any process by which an object
     becomes new commercial goods, including any process incidental or
     ancillary to the completion would be manufacture. Manufacture
     means bringing into existence new goods. This Court observed in             D
     Union of India v. Delhi Cloth Mills, [1963] Suppl. 1 S.C.R. 586 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 is necessary and there must be
     transformation, a new and different article must emerge having a dis-
     tinctive name, character or use. The question, therefore, is whether the    E
     activity carried out by the appellant of assembling the three compo-
     nents of the weighbridge brings into being complete weighbridge
     which was a distinctive name, characte.r or use. See also the observa-
     tions of this Court in Allenburry Engineers (p) Ltd. v. Ramakrishna
     Dalmia & Ors., [1973] 2 S.C.R. 257 and Jdandas v. Ananat
     Ramchandra Phadke, [1981] 3 Scale 1790.                                     F
           The appellant's contention before the Tribunal was that it was
     only preparing a part and that part is dutiable as a separate part. The
     appellant, however, did the work of assembling. As a result of the
     work of the appellant a new product known in the market and known
     under the excise item "weighbridge" comes into being. The appellant         G
     will become a manufacturer of that product and as such liable to duty.
     That is precisely what the Tribunal found on the facts of the case. The
     appellant seems to have been obsessed by the idea that as a part of
     machine is liable to duty t.hen the whole end product should not be
     dutiable as separate excise goods. That is mistake, a part may be goods
     as known in the excise laws and may be dutiable. The appellant in this
    4          SUPREME COURT REPORTS                 [1988] Supp. 3 S.C.R.

A   case claims to have manufactured only the indicator system. If the
    indicator system is a separate part and a duty had been paid on it and if
    the rules so provide then the appellant may be entitled to abatement
    under the rules. But if the end product is a separate product which
    comes into being as a result of the endeavour and activity of the
    appellant then the appellant must be held to have manufactured the
B
    said item. When parts and the end product are separate_ly dutiable-
    both are taxable.

          In that view of the matter, the appellant's case that it is liable
    only for the component part and not the end product cannot be               ...
    entertained. The Tribunal was, therefore, right in the view it took.
C   These appeals have no merit and are accordingly dismissed. This order             /   '
    will not preiudice the rights of the appellant to claim, if any, abate-
    ment as indicated before according to the rules if the appellant is so
    entitled.

    R.S.S.                                               Appeals dismissed.