COLLECTOR OF CENTRAL EXCISE, JAIPUR ETC. ETC. versus RAJASTHAN STATE CHEMICAL WORKS DEEDWANA RAJASTHAN ETC.ETC

Citation: [1991] SUPP. 1 S.C.R. 124 · Decided: 17-09-1991 · Supreme Court of India · Bench: S. RANGANATHAN · Disposal: Appeal(s) allowed

Judgment (excerpt)

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COLLECTOR OF CENTRAL EXCISE, JAIPUR ETC. ETC. 
v. 
· RAJASTHAN STATE CHEMICAL WORKS DEEDW~A, 
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• RAJASTHAN ETC.·:_ ETC. I 
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SEPTEMBER , 17, 
199~ 
(S. RANGANATHAN, M. FATHIMA BEEVI AND ND. OJHA, JJ.). 
Central Excises and Salt Act, 1944: Section 2(/), Item No. 68 of First 
Schedule-Notificauon No.179/77, CE dated 18.6.1977 -
Exemption in 
relation to manufacture of which no process is carried on with the aid of 
C power-Assessees using power. to lift raw materials- Whe~r falls within 
'process of manufacture'- Exemption-Whether available. 
" 
Worm & Phrases: "Ma11ufacturing Process" - Meaning of. 
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By way of notification dated.18.6.1977, the Central .Government 
D exempted from duty all goods falling under Tariff Item No. 68 of the First 
Schedule to·. the Central i;ccises and Salt Act, 1944 in or in relation to 
manufacture of wbkh no process was ordinarily carried on with the aid of 
power. 
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The respondents in the first set of appeals have been manufacturing 
E crude sodium sulphate.·· Since the respondents used diesel pumps for 
pumping brine into salt paiis, in the process ofnianufacture, the benefit of 
the said notification was denied to them on the ground that the process of 
manufacture was earried on with the aid of power. However, on appeal, 
the Collector of Customs (Appeals) all~wed the benefit to the respondents. 
F . Revenue preferred an appeal and the Tribunal affirmed the Collector's 
order. 
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In the other appeals, the Respondents, manufacturer of lime, •Bed 
to lift the raw materials to the platform at.the head of the kiln by the aid 
of power and the raw materials were mixed.manually into the kiln. The 
benefit of the said notification was denied to the Respondents by the As-
G sistant Collector. Even an appeal before the Collector of Appeals failed. 
However, on appeal the Tribunal accepted the claim of the Respondents. 
In all these matters the Tribunal took the view that the 
manufacturing process started from the stage of feeding raw "!aterials 
into the salt pan or the kiln as the case may be and the transferring of the 
H raw materials was a stage prior to the manufacturing Pzocess and so the 
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C. C. E. v. . STATE CHEMICAL WORKS 
125 
use of power for such transfer would not disentitle the respondents from 
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the benefit under the said notification. 
Aggrieved by the orders of the Tribunal, the Revenue has preferred 
the present appeals. 
Before this Court, the Revenue contended that pumping the brine , B 
into the pan or lifting the raw materials to the kiln head was a process in 
relation to the manufacture of the final product and since that process 
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with the aid of power was integrally connected with the manufacture, the 
exemption would not apply. 
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The Respondents contended that if the p~ocess carried on with the 
aid of power does not bring about any change in the raw materials, it 
cannot be said that any process in or in relation to the manufacture of an 
article has been carried on with the aid of power and, therefore, mere 
transfer of raw materials by the use of power cannot be considered as a 
process of manufacture. 
Allowing the appeals, this Court, 
HELD: 1. Process in manufacture or in relation to manufacture 
implies not only the production but the various stages through which the 
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raw material is subjected to change by different operations.· It is the 
cumulative effect of the various processes to which the raw materials is E 
subjected to the manufactured product emerges. Therefore, each step 
towards such production would be a process in relation to manufacture. 
Where any particular process is so integrally connected with the ultimate 
production of goods that but for that process manufacture of processing 
of goods would be impossible or commercially inexpedient, tb~t process is 
one in relation to the manufacture. (130 E-F). 
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2.1 The natural meaning of the word 'process' is a mode of 
treatment of certain materials in order to produce a good result, a species 
of activity performed on the subject-matter in order to transform or 
reduce it to a certain stage. There is nothing in the natural meaning of the 
word 'process' to exclude its application to handling. There ml!y be G 
process which consists only in handling and there may be a process which 
involves no handling or not merely handling but also use. It may be a 
process involving the handling of the material and i

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