COLLECTOR OF CENTRAL EXCISE, MADRAS. versus KUTTY FLUSH DOORS & FURNITURE CO. (P) LTD.

Citation: [1988] 3 S.C.R. 363 · Decided: 28-03-1988 · Supreme Court of India · Bench: SABYASACHI MUKHERJI · Disposal: Dismissed

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Judgment (excerpt)

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COLLECTOR OF CENTRAL EXCISE, MADRAS. 
v. 
KUTTY FLUSH DOORS & FURNITURE CO. (P) LTD. 
MARCH 28, !988 
ISABYASACHJ MUKHARJJ AND S. RANGANATHAN, JJ.J 
Central Excises and Salt Act, 1944: Section 35L and Tariff Item 
No. 68-Timber logs sawn into sizes-Whether new product emerges--
Whether excise duty becomes chargeable-Concept of 'manufacture'-
What is. 
Words and Phrases: 'Manufacture'--:--Meaning of. 
The respondent firm filed a classification list before the Assistant 
Collector, Excise, and sought approval for treating sawn timber and 
dried timber as non-excisable on the ground that sawing of timber logs 
into sizes did not amount to manufacture. The Assistant Collector held 
that conversion of the timber logs into sawn timber satisfied the condi-
lions of manufacture since it involved transformation, whereby a new 
and different article with the distinct name, character or use, which was 
different from the timber logs, emerged, and, therefore, excise duty 
was leviable under Tariff Item 68. On appeal, the Collector concurred 
with the Assistant Collector. Allowing the appeal of the respondent, the 
Customs, Excise and Gold (Control) Appellate Tribunal held that no 
new product emerged by sawing of timber into several sizes. Hence the 
appeal by the Revenue under Section 35(L) of the Central Excises and 
Salt Act, I944. 
Dismissing the appeal by the State, 
HELD: I. I Excise duty becomes chargeable only when a new and 
different article emerges having a distinct name, character and use. 
This is a question of fact depending upon the relevant material whether, 
as a result of activity, a new and different article emerges having a 
A 
B 
c 
D 
E 
F 
distinct name, character and use. l365B-D I 
G 
1.2 'Manufacture' implies a cliange, but every change is not man-
ufacture and yet every change of an article is the result of treatment, 
labour and manipulation. But something more was necessary and there 
must be transformation; a new and different article must emerge hav-
ing a distinct name, character or use. l365E-FJ 
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363 
364 
SUPREME COURT REPORTS 
I 1988] 3 S.C.R. 
A 
Having regard to the facts of the case, as found by the Tribunal 
which was the final fact finding authority and regard being had to the 
principles for determining the questions which were correctly applied.by 
the Tribunal, the conclusion of the Tribunal that no new product 
emerged by sawing of timber into several sizes Is unassailable. [365F-G I 
B 
Union of India v. Delhi Cloth General Mills, [1963] J Suppl. SCR 
c 
586; Allenburry Engineers Pvt. Ltd. v. Ramakrishna Dalmia & Ors., 
[1973] 2 SCR 257 and State of Orissa & Ors. v. The Titaghur Paper 
Mills Co. Ltd. & Anr., [ 1985] 3 SCR 26, referred to. 
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 468 
of 1988. 
From the Order dated 7. 7 .1987 of the Customs Excise and Gold 
(Control) Appellate Tribunal, New Delhi in Appeal No. 383/83-D. 
G. Ramaswami, Additional Solicitor General, Ms. Indu Malho-
D tra and Mrs. Sushma Suri, for the Appellant. 
The Judgment of the Court was delivered by 
SABY ASA CHI MUKHARJI, J. This is an appeal under Section 
35L(b) of the Central Excise and Salt Act, 1944 (hereinafter called 'the 
E Act'). The appeal is directed against the Order of the Customs Excise 
and ·Gold (Control) Appellate Tribunal (hereinafter called 'the 
CEGAT'). 
The respondent herein filed a classification list on 16th March, 
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19b8l 2 sTheekingbappr?val of fhSawn timdber and dnh· ed timbber
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as non-excis
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a e. 
e su m1ss1on o t e respon ent wast at t1m er ogs were on y ~ 
sawn into sizes and these did not tantamount to any manufacture .. 
However, the Assistant Collector, Madras, held that the conversion of 
timber' logs into sawn timber satisfied the conditions of manufacture 
insofar as the conversion of timber logs into sawn timber involves 
transformation whereby a new and different article with the distinct 
G name, character or use emerges which is different from timber logs. It 
was held accordingly that excise duty @ 8% ad valorem under Tariff 
Item 68 of the erstwhile Central Excise Tariff was leviable. 
The respondent filed an appeal before the Collector of Appeals 
who concurred with the Assistant Collector upholding the duty. 
H 
Aggriev~d thereby the respondent filed an appeal before the CEGAT. 
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COLLECTOR OF C.E. v. KUTI'Y FURNITURE [MUKHARJI, J.[ 
365 
The Tribunal in the Judgment under appeal, relied on its decision in 
the ca

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