SUPREME COURT OF INDIA

Before:-A.P. Misra and R.P. Sethi, JJ.

Civil Appeal Nos. 2463-2466 of 1986. D/d. 15.4.1999.

Collector of C. Ex.,Thane & Madras - Petitioner

Versus

Ajit India Pvt. Ltd. - Respondent

Central Excise Act, 1944 Sections 2(d) and 2(f)

Case Referred :-

Union of India v. Delhi Cloth And General Mills Co. Ltd., AIR 1963 Supreme Court 791.

JUDGMENT

The short question which is raised in these appeals are whether the classification and assessment of aluminium pieces which is subject to processing like drilling, punching and revetting etc. belongs to aluminium section or is identifiable as component part of windows, doors and like and whether if it belongs to aluminium section not liable to duty or is assessable to duty as component part under Tariff Item No. 68. The group of appeals were taken up by the Tribunal and in all the said appeals three questions were raised which are as under :

(i) Classification and assessment of fully assembled windows, doors, shutters and other like products removed from the factory in fully assembled condition;

(ii) Classification and assessment of such products, if cleared from the factory of CKD or in ready to assemble condition for subsequent assembly at site;

(iii) Classification and assessment of pieces which have been subjected to processing like drilling, punching, revetting etc. which the appellants claim to be aluminium sections and the department claims to be identifiable or component parts of windows, doors and the like whether they should be held to be aluminium sections only, not liable to duty again under Tariff Item 68 or held assessable as component parts under T.I. 68.

2. So far the present appeal, we are only concerned with the third question. Before adverting to the issue it is necessary to give certain short facts. Assistant Collector of Central Excise held that product manufactured at the Bombay factory of the respondent is excisable under Tariff Item No. 68. The Appellate Tribunal remanded the case to the Appellate Collector for reconsideration. After remand the Appellate Collector held that the products in question are excisable goods and classified it under T.I. No. 68. So far respondent's factory at Madras the Assistant Collector rejected respondent's contention that the products were non-excisable goods and held that it is assessable and as component parts are excisable and classified it under T.I. 68. Appeal to the Collector was dismissed. The Tribunal by common judgment with reference to the product manufactured at in the factory at Madras and Bombay, partly allowed the appeals, and held issue Nos. 1 and 2 in favour of the Department and issue No. 3 against the Department. As we said in the present case we are only concerned with issue No. 3 in this Departmental appeal. The Tribunal have recorded the finding that entire range of the respondent's activity with respect to these aluminium pieces do not constitute manufacture of excisable goods. The Tribunal relied on decision of this Court in Union of India v. Delhi Cloth And General Mills Co. Ltd.- AIR 1963 Supreme Court 791 to hold the manufacture must involve bringing into existence a new substance and it does not mean merely producing to bring some change in substance. Manufacture may include some change but every change is not a manufacture within the meaning of the act. With reference to the goods, held, to become goods an article must be something which can ordinarily come to the market. We are only concerned in this case with the pieces of aluminium section. A clear cut finding is recorded that it is not possible to make, whether these pieces have acquired any distinct name, character or use or whether they are "goods". No evidence is produced by the department. The Tribunal pointed out that before an article is to be held as goods or it constitutes to be manufactured, there should be a clear cut finding based on evidence with respect of each class of pieces. In the present case it was not done and the burden to show this was on the Department. The Tribunal clearly recorded that they are not subject to excise duty. The Tribunal rejecting the other part of the Department case that those pieces are component part of standardise frames and doors.

3. The finding is that in respect of tailor-made item there can be no question of it being component part but only replacement. Though it reserves that it may be in a given case even tailor made items if produced in much quantity may become standard item and the concept of component part may then emerges. However, it would depend on the fact of each case and it is for the Revenue to prove and for the authorities to record such finding, before such an item could be subjected to excise duty. This is not done. We find in the present case, the finding recorded by the courts below in the impugned order of the Tribunal is such which requires no interference. Thus we do not find any merit in this Department's appeal. Appeals are accordingly dismissed. Costs on the parties.

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