LexCOMMISSIONER OF CENTRAL EXCISE, BANGALORE-II versus M/S. OSNAR CHEMICAL P. LTD.
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(2012] 2 S.C.R. 1035 COMMISSIONER OF CENTRAL EXCISE, BANGALORE-II v. M/S. OSNAR CHEMICAL P. LTD. (Civil Appeal Nos. 4055-4056 of 2009) JANUARY 13, 2012 [D.K. JAIN AND ASOK KUMAR GANGULY, JJ.) Central Excise Act, 1944 - s.2(f) - Addition and mixing A B of polymers and additives to heated bitumen to get superior quality bitumen viz. Polymer Modified Bitumen (PMB) or C Crumbled Rubber Modified Bitumen (CRMB ) - If amounts to manufacture of a new marketable commodity and as such exigible to Excise duty - Held: In order to bring a process in relation to any goods within the ambit of s. 2(f) of the Act, the same is required to be recognised by the legislature as D manufacture in relation to such goods in the Section notes or Chapter notes of the First Schedule to the Tariff Act - Therefore, in order to bring petroleum bitumen, falling under CSH 27132000, within the extended or deemed meaning of the expression 'manufacture', so as to fall under CSH E 27150090, the process of its treatment with polymers or additives or with any other compound is required to be recognised by the legislature as manufacture under the Chapter notes or Section notes to Chapter 27 - No such process or processes have been specified in the Section notes or Chapter notes in respect of petroleum bitumen falling F under Tariff Item 27132000 or even in respect of bituminous mixtures falling under Tariff Item 27150090 to indicate that the said process amounts to manufacture - Thus, the process of adding polymers and additives to heated bitumen to get a better quality bitumen, viz. PMB or CRMB, cannot be given G an extended meaning under the expression manufacture in terms of s.2(f)(ii) of the Act- PMB or CRMB cannot be treated as bituminous mixtures falling under CSH 27150090 .and 1035 1036 SUPREME COURT REPORTS [2012] 2 S.C.R. A would classified under CSH 27132000 pertaining to tariff for petroleum bitumen - Central Excise Tariff Act, 1 l185 - Chapter Sub-heading 27132000 and 27150090. Excise Laws - Manufacture - Test to determine - Held:"Manufacture". can be said to have taken place only when 8 there is transformation of raw materials into a new and different article having a different identity, characteristic and use - Mere improvement in quality does not amount to manufacture - It .is only when the change or a series of changes take the commodity tO a point where commercially it can no longer be C regarded as the original commodity but is instead recognized as a new and distinct article that manufacture can be said to have taken place. Words and Phrases - Manufacture - Meaning of D The question which arose for consideration in the present appeals was whether the addition and mixing of polymers and additives to heated bitumen to get supE!rior quality bitumen viz. Polymer Modified Bitumen (PMS:) or Crumbled Rubber Modified Bitumen (CRMB) amounts to E manufacture of a new marketable commodity and as such exigible to Excise duty under the Central Excise Act, 1!~44. Dismissing the appeals, the Court HELD:1.1. The expression 'manufacture' defined in F Section 2(f) of the Central Excise Act, 1944, inter a/ia includes any process which is specified in relation to any goods in the Section or Chapter Notes of First Schedule to the Central Excise Tariff Act, 1985. It is manifest that in order to bring a process in relation to any goods within G the an:ibit of Section 2(f) of the Act, the same is required to be recognised by the legislature as manufacture in relation to such goods in the Section notes or Chapter notes of the First Schedule to the Tariff Act. Therefore, in order to bring petroleum bitumen, falling under CSH H 27132000, within the extended or deemed meaning of the COMMNR. OF CENTRAL EXCISE, BANGALORE-II v. 1037 OSNAR CHEMICAL P. LTD. expression 'manufacture', so as to fall under CSH A · 27150090, the process of its treatment with polymers or additives or with any other compound is required to be recognised by the legislature as manufacture under the Chapter notes or Section notes to Chapter 27. [Para 15] [1049-F-H; 1050-A] B 1.2. In the present case, a plain reading of the Schedule to the Act makes it clear that no such process or processes have been specified in the Section notes or Chapter notes in respect of petroleum bitumen falling under Tariff Item 27132000 or even in respect of C bituminous mixtures falling under Tariff Item 27150090 to indicate that t
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