COLLECTOR OF CENTRAL EXCISE, CALCUTTA versus JAY ENGINEERING WORKS LTD.

Citation: [1988] SUPP. 3 S.C.R. 998 · Decided: 28-11-1988 · Supreme Court of India · Bench: SABYASACHI MUKHERJI · Disposal: Dismissed

Judgment (excerpt)

A 
COLLECTOR OF CENTRAL EXCISE, CALCUTIA 
B 
c 
v. 
JAY ENGINEERING WORKS LTD. 
NOVEMBER 28, 1988 
[SABYASACHI MUKHARJI AND S. RANGANATHAN, JJ.] 
Central Excises and Salt Act, 1944-Section 35L(b) and Central 
Excise Tariff Item 68 and Notification No. 201/79-CE dated 4th June, 
1979...Affixation of name plates on fans-Whether dealer entitled to 
obtain proforma credit. 
The respondent is the manufacturer of electric fans. The company 
brought into Its factory nameplates under Tariff Item 68 of the Central 
Excise Tariff. The nameplates were affixed to the fans before market. 
ing them. The respondent claimed the benefit of proforma credit in 
terms of Notification No.201/79 dated 4-6-1979 which stated that all 
D excisable goods on which duty of excise was leviable and in the 
manufacture of which any goods falling under Tariff Item No. 68 being 
'th~ inputs' bad been used, were exempt from so must of the duiy of 
excise leviable thereon was equivalent to the duty of excise already paid 
on the inputs. The respondent claimed the benefit of proforma credit 
for the goods l.e nameplates on the plea that the goods were Intended to 
It be used as inputs in the manufacture of electric fans. 
F 
The Asstt. Collector, Central Excise disallowed the proforma 
credit. The respondent preferred an appeal before the Collector (Ap-
peals) Central Excise, and the same was allowed treating the said goods 
as inputs in terms of the June 1979 Notifications. 
The Department appealed to the Customs, Excise and Gold (Con-
trol) Appellate Tribunal which held that even though electric fans could 
function without the nameplates, no electric, fan was removed from 
the factory for being marketed without the nameplates, as the amxatlon 
of the nameplate was considered an essential requirement from the 
G point ofview of the Excise Tariff. 
H 
The Department therefore filed an appeal under Section 35 L(h) 
of the Central Excises and Salt Act, 1944 before this Court. 
Dismissing the appeal, this Court, 
-
COLLECTOR OF CE. v. JAY ENGG. [MUKHAR.ll, J.] 
999 
HELD: 1. The Department's inst~uctions requiring every manu-
A 
" 
facturer to affix the nameplates·on the'fans, indicate that nameplate 
was an essential ingredient to complete the process of 'manufacture' 
for marketable electric fans. [lOOlE] 
2. The Tribunal was right In arriving at the conclusion that the 
nameplate was not a piece of decoration. Without the nameplates, the 
B 
electric fans as such, could not be marketed; and that the dealer was 
entitled to the benefit of the Notification No. 201/79-CE for the purpose 
of obtaining proforma credit. [lOOlF-G] 
3. Fans with nameplates, have certain value which the fans with-
out the nameplates, do not have. If that be so, then the value _added for c 
the accretion of nameplate was entitled to proforma credit in terms of 
the said notification. It is true that an electric fan may perform Its 
essential functions without aflbation of the nameplate, but that is not 
enough. Electric fans do not become marketable products without 
affixatlon of nameplates. [lOOlG-H] 
D 
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1630 
of 1988. 
From the Judgment and Order dated 21.1.1988 of the Customs, 
Excise and Gold (Controi) Appellate Tribunal, New Delhi in Appeal 
No. 2321/83-BI in Order No. 18/1988 'B'. 
E 
G. Ramaswamy, Additional Solicitor General, K. Swami and 
Mrs. Sushma Suri for the Appellant. 
RavindeL Narain, P.K. Ram and D.N. Misra for the Respon-
dent. 
F 
The Judgment of the Court was delivered by 
SABYASACHI MUKHARJI, J. This is an appeal against the 
decision and order of the Customs, Excise and Gold (Control) Appel-
late Tribunal under Section 35L{b) of the Central Excises and Salt (} 
Act, 1944 {hereinafter called 'the Act'). 
The respondent is the manufacturer of electric fans, and brought 
into its factory nameplates under tariff item 68 of the erstwhile Central 
Excise Tariff. The nameplates were affixed to the fans. before market-
ing them. The respondent daimed the benefit of profo_rma credit in H 
1000 
SUPREME COURT REPORTS 
[ 1988] Supp. :i S.C.R. 
. 
A terms of Notification No. 201/79 dated 4th June, 1979, which was for I 
the -purpose of relief on the duty of excise paid on goods falling under 
Tariff Item 68, when these goods are used in the manufacture of other 
excisable goods. The said notification stated in supersession of the 
notification No. 178/77 of the Central Excise, dated 18th June, 1977, 
all excisable goods 

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