LexCOMMISSIONER OF CENTRAL EXCISE, CHENNAI-II COMMISSIONERATE & ORS. ETC. versus M/S. TARPAULIN INTERNATIONAL & ORS. ETC.
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[2010] 9 S.C.R. 620 A COMMISSIONER OF CENTRAL EXCISE, CHENNAl-11 B c COMMISSIONERATE & ORS. ETC. v. M/S. TARPAULIN INTERNATIONAL & ORS. ETC. (Civil Appeal No. 5341 of 2005 etc. etc.) AUGUST 04, 2010 [D.K. JAIN AND H.L. DATTU, JJ.) Central Excise Tariff Act, 1985: First Schedule - Heading 63.01 - Tarpaulin made-ups - Levy of excise duty on - HELD: Merely because certain item falls within the Schedule, it would not be dutiable under the Excise Law, if the said article is not 'goods' known to the market - Marketability is an essential ingredient for goods to D be dutiable under the Schedule - Therefore, there can be no levy of excise duty on tarpaulin made ups - Central Excise Act, 1944. E Central Excise Act, 1944: s. 2(f) - 'Manufacture' - Tarpaulin made-ups - Prepared by cutting tarpaulin from tarpaulin, sheets, stitched and eye- lets fixed thereto - HELD: The original material used i.e. the tarpaulin, is still called tarpaulin, made-ups even after F undergoing the said process - Tribunal rightly held that conversion of tarpaulin into tarpaulin made-ups would not amount to manufacture - Central Excise Tariff Act, 1985. In the instant appeals filed by the Revenue, the only question for consideration before the Court was: G "whether the tarpaulin made-ups which are prepared after cutting and stitching the tarpaulin fabric and fixing the eye-lets would involve the process of manufacture and, hence, would fall within the definition of 'manufacture' ?" H 620 COMMISSIONER OF CENTRAL EXCISE, CHENNAl-11 621 v. TARPAULIN INTERNATIONAL Dismissing the appeals, the Court HELD: 1.1 It is not in dispute nor can it be disputed that Tarpaulin made ups are covered under sub-heading 63.01 of the Schedule to the Central Excise Tariff Act, 1985. A It is now well settled that merely because certain article 8 falls within the Schedule, it would not be dutiable under the Excise Law, if the said article is not 'goods' known to the market. Marketability, therefore, is an essential ingredient in order to be dutiable under the Schedule to Central Excise Tariff Act, 1985. [para 22] [630-H; 631-A-B] C 1.2 The Tribunal has rightly held that conversion of Tarpaulin into Tarpaulin made-ups would not amount to manufacture. When Tarpaulin sheets are stitched and eyelets are fixed, it does not change the basic characteristic of the raw material and the end product. D The process of stitching and fixing t:yelets would not amount to manufacturing process. It does not bring into existence a new and distinct product with total transformation in the original commodity. The original material used, i.e., the tarpaulin, is still called tarpaulin E made-ups even after undergoing the said process. Therefore, even if there is value addition, the same is minimum. To attract duty there should be a manufacture 1 to result in different goods and the goods sought to be : ~ubject to duty should be known in the market as such. F Therefore, there can be no levy of Central Excise duty on the tarpaulin made-ups. [para 23-24] [631-G-H] Kores India Ltd. Vs. Commissioner of Central Excise, Chennai, 2004 (174) ELT 7 (S.C.); India Cine Agencies Vs. Commissioner of Income Tax, Madras, 2009 (233) ELT 8 G (S.C.); Tungabhadra Industries v. CTO, (1961) 2 SCR 14, Union of India v. Delhi Cloth & General Mills Co.Ltd.,(1997) 5 SCC 767; South Bihar Sugar Mills v. Union of India (1968) H 622 SUPREME COURT REPORTS (2010] 9 S.C.R. A 3 SCR 21; India Cine Agencies v. Commissioner of Income Tax, Madras, 2008 (233) ELT 8(SC); Union of India v. Delhi Cloth and General Mills, 1977 (1) ELT (J199); Union of India v. Delhi Cloth and General Mills, 1977 (1) ELT (J199) Bhor Industries Ltd., Bombay v. Collector of Central Excise, B Bombay, 1989 (40) ELT 280(SC); Collector of Central Excise Vs. Ku lay Flush Door and Furniture Co. (P) Ltd., (1988) SupJ}. SCC 239; B.P.L. India Ltd. v. Commissioner of Central Excise, Cochin, 2002 (143) ELT 3(SC) ; Empire Industries Ltd. v. Union of India, (1986) 162 ITR 846(SC); C.C.E. v. S.R. c Tissues Pvt. Ltd., 2005(186) E.L.T.385(S.C.); Moti Laminates Pvt. Ltd. v. CCE, 1995 (76) ELT 241; and Dharangadhara Chemicals Works Ltd. v. Union of India, 1997 (91) ELT 253 - relied on. D Adams v Rau, 46 CLR 572 High Court of Australia - referred to. Case Law Reference: · 2004 (174) ELT 7 (S.C.) relied on para 8 E 2009 (233) ELT 8 (S.C.) relied on para 8 (1961) 2 SCR 14 relied
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