Supreme Court - Daily Orders
Commnr. Of Centarl Excise vs M/S. Amritlal Chemaux Ltd. on 5 May, 2015
Bench: A.K. Sikri, Rohinton Fali Nariman
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 1092 OF 2005
COMMISSIONER OF CENTRAL EXCISE ... Appellant
VERSUS
M/S. AMRITLAL CHEMAUX LTD. ... Respondent
O R D E R
There are three products involved in the present appeal and the question is as to whether the process undertaken by the respondent-assessee in these products amounted to manufacture or not. The products are various dyes & dye bases, napthols & fast bases, and chrome pigments. They fall in Chapter 29 and Chapter 32 of the Central Excise Tariff Act, 1985 (hereinafter referred to as 'Act') respectively. It is not in dispute that the assessee is not the manufacturer of these products. It buys the same from a manufacturer in bulk quantities in bulk packing. Thereafter, some process is undertaken thereupon, as noted hereinafter and that has given rise to the dispute as to whether such a process amounts to manufacture or not. The process is of repacking and / or labeling. It is thus, an admitted case that the assessee is not a manufacturer in traditional sense. However, by virtue of Chapter Note 11 of Chapter 29 and Chapter Note 3 Signature Not Verified Digitally signed by Meenakshi Kohli Date: 2015.05.16 of Chapter 32 of the Act, which gives extended meaning to 13:44:12 IST Reason: 'manufacture' by creating a fiction, the appellant wants to C.A. No. 1092/2005 1 rope in the respondent-assessee under the aforesaid Chapter Notes. The two chapter notes, viz., Chapter Note 11 of Chapter 29 and Chapter Note 3 of Chapter 32 are identically worded and read as under: -
Chapter Note 11 of Chapter 29:
“In relation to products of this chapter, labelling or re-labelling of containers and re-packing from bulk to retail packs or the adoption of any other treatment to render the product marketable to the consumer, shall amount to manufacture.” Chapter Note 3 of Chapter 32:
“In relation to products of heading No.32-06, labelling or re-labelling of containers and re-packing from bulk packs to retail packs or the adoption of any other treatment to render the product marketable to the consumer, shall amount to manufacture.” It was the endevour of Mr. K. Radhakrishnan, learned senior counsel appearing for the appellant, to argue that even if one of the two processes, viz., labeling or relabeling of containers or for that matter, repacking from bulk to retail packs is undertaken, the same should be treated as manufacture. To put it otherwise, he wanted us to read the word 'and' not conjunctively but disjunctively. We are not impressed with this argument of Mr.Radhakrishnan. It is clear from the plain language of the aforesaid Chapter Notes which use both the expression 'or' as well as 'and' at different places. Thus, by using the two expressions, the intention of the legislature is manifest that insofar as the process of label or relabeling C.A. No. 1092/2005 2 of containers is concerned, it would amount to manufacture only if the other condition, viz., repacking from bulk to retail pack is also satisfied. The aforesaid view gains credence from other fact, i.e., where the second process is treated as manufacture, viz., “adoption of any other treatment to render the product marketable to the consumer”, the expression 'any other treatment' and that too, with intention to render it marketable clearly shows that insofar first part is concerned, both the conditions have to be satisfied.
Applying the aforesaid principle to the facts of this case, in the first instance, we find that though the show cause notice covered all the three products, viz., dyes & dye bases, napthols & fast bases, as well as chrome pigments, the final order which was passed by the adjudicating authority, did not levy any excise duty on dyes and dye bases. Thus, we are concerned with the remaining two products, viz., napthols & fast bases and chrome pigments.
Insofar as the napthols & fast bases is concerned, even from the order of the Commissioner, it becomes clear that though there was repacking and even relabeling, the repacking of bulk was not into retail packing as the goods after repacking were supplied to industrial consumers on C.A. No. 1092/2005 3 wholesale basis. It is specifically stated so by the assessee which fact is not denied by the Commissioner. Therefore, both the conditions mentioned in the Chapter Notes are not satisfied.
Insofar as the chrome pigments are concerned, the assessee only obliterated the name which was appearing on containers and the name of the assessee along with the logo is stenciled on such container that may amount to relabeling. However, the process of repacking was not undertaken at all by the assessee. Thus, here also both the eligibility conditions which are to be fulfilled have not been satisfied.
We, thus, do not find any merit in this appeal which is accordingly dismissed.
.........................., J. [ A.K. SIKRI ] .........................., J. [ ROHINTON FALI NARIMAN ] New Delhi;
May 05, 2015
C.A. No. 1092/2005 4
ITEM NO.106 COURT NO.13 SECTION III
S U P R E M E C O U R T O F I N D I A
RECORD OF PROCEEDINGS
Civil Appeal No(s). 1092/2005
COMMNR. OF CENTRAL EXCISE Appellant(s)
VERSUS
M/S. AMRITLAL CHEMAUX LTD. Respondent(s)
(with appln. (s) for stay and office report) WITH C.A. No. 9784-9785/2013 (With appln(s) for exemption from filing c/c of the impugned order) C.A. No. 2088-2089/2014 (With Office Report) Date : 05/05/2015 These appeals were called on for hearing today. CORAM :
HON'BLE MR. JUSTICE A.K. SIKRI HON'BLE MR. JUSTICE ROHINTON FALI NARIMAN For Appellant(s) Mr. K. Radhakrishnan, Sr. Adv.
Mr. Rupesh Kumar, Adv.
Mr. Ritesh Kumar, Adv.
Mr. T. M. Singh, Adv.
Mr. B. Krishna Prasad, Adv.
Mr. Jaideep Gupta, Sr. Adv.
Mr. Kunal Chatterji, Adv.
Ms. Maitrayee Banerjee, Adv.
For Respondent(s) Mr. Alok Yadav, Adv.
Mr. Somnath Shukla, Adv.
Mr. Udit Jain, Adv.
Mr. Praveen Kumar, Adv.
UPON hearing the counsel the Court made the following O R D E R C.A. No. 1092/2005 The appeal is dismissed in terms of the signed order. C.A. No. 1092/2005 5 C.A. No. 9784-9785/2013 C.A. No. 2088-2089/2014 Heard in part.
List on Monday, 11th May, 2015, as part heard.
(Nidhi Ahuja) (Suman Jain)
COURT MASTER COURT MASTER
[Signed order is placed on the file.] C.A. No. 1092/2005 6