COMMISSIONER OF CENTRAL EXCISE, JAIPUR versus M/S. MAHAVIR ALUMINIUM LTD.

Citation: [2007] 6 S.C.R. 423 · Decided: 11-05-2007 · Supreme Court of India · Bench: ASHOK BHAN · Disposal: Appeal(s) allowed

Cited by 1 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

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COMMISSIONER OF CENTRAL EXCISE, JAIPUR 
v. 
MIS. MAHA VJR ALUMINIUM LTD. 
MAY 11, 2007 
[ASHOK BHAN ANDC.K. THAKKER, JJ.) 
Central Excise and Salt Act, 1944: 
s.2(j)-Conversion of Aluminium Ingots into Aluminium billets during 
the intermediate stage by the process of remelting and adding other alloys-
Held, amounts to manufacture-Billet is different commercial commodity from 
Ingot, having separate and identifiable marketability, hence attracts excise 
duty. 
The assessee was carrying out conversion of Aluminium Ingots into 
Aluminium Billets during the intermediate stage by the process of re-melting 
and adding other alloys. Aluminium Billets were consumed captively for the 
manufacture of Aluminium Irrigation Pipes. The assessee was also selling 
the said commodity in the market by paying Excise Duty • 
Commissioner issued demand notice towards clearance of Aluminium 
Billet for captive consumption. The demand was confirmed. On appea~ CEGAT 
· held that the process carried out by the assessee of Melting Ingots into Round 
Ingots for the purpose of extrusion did not amount to 'manufacture' and the 
taxable commodity remained the same although in different form. Aggrieved 
department filed the present appeal. 
Allowing the appeal, the Court 
HELD: I. The word 'manufacture' is a verb which is generally 
understood to mean as "bringing into existence a new substance" and does 
not mean merely "to produce some change in a substance, however minor in 
consequence the change may be". [Para 14) [427-C) 
Union of India & Anr. v. Delhi Cloth & General Mills Co. Ltd. & Ors., 
(1963( Supp 1SCR586; Empire Industries Ltd. v. Union of India, [1985) 3 
SCC 314; Union Carbide India Ltd. v. Union of India & Ors., [1986( 2 SCC 
423 
A 
B 
c 
D 
E 
F 
G 
H 
424 
SUPREME COURT REPORTS 
(2007] 6 S.C.R. 
A 547 and Union of India & Ors. v. J.G. Glass Industries Ltd. & Ors .. ( 1998] 2 
sec 32, relied on. 
2. Ingots and Billets are two different commercial commodities. They 
have separate, distinct and identifiable marketability and saleability. The 
assessee used Aluminium Billets captively but is also selling in open market. 
B Therefore, the Commissioner was right in holding that the assessee was liable 
to pay Excise Duty. (Para 21] (428-EJ 
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 6197 of2001. 
From the Final Order No. 208/2001-B dated 25.04.2001 of the CEGAT, 
C New Delhi in Appeal No. E-3172 of 2000-B. 
V. Shekhar, Sr. Adv., Sudhir Kr. Sajwan, G. Prakash and P. Parmeswaran 
for the Appellant. 
A.R. Madhav Rao and Monish Panda (For M.P. Devanath) for the 
D Respondent. 
The Judgment of the Court was delivered by 
C.K. THAKKER, J. 1. A short question which arises for our consideration 
in the present appeal is whether the process of conversion of Aluminium 
E Ingots into Aluminium Billets during the intermediate stage by the process 
of re-melting and adding other alloys amounts to 'manufacture' within the 
meaning of Section 2(t) of the Central Excise Act, I 944 (hereinafter referred 
to as 'the Act') and Central Excise Duty is chargeable thereon? 
2. The facts of the case are that Mis Mahavir Aluminium Ltd., Bhiwadi 
F (hereinafter referred to as 'the Assessee') was engaged in the manufacture 
of Aluminium Products falling under Chapter 76 of the Central Excise Tariff 
Act, 1985. The assessee was manufacturing Aluminium Billets and was 
consuming it captively for the manufacture of Aluminium Irrigation Pipes 
exempted from payment of duty. The assessee was also selling the said 
G commodity in the market by paying Excise Duty. 
3. It was the case of the Commissioner of Central Excise, Jaipur 
(hereinafter referred to as 'the Revenue') that the assessee did not mention 
the facts in classification lists/declarations filed under Rule 173 B of the 
Central Excise Rules, 1944 nor produced record relating to production of 
H Aluminium Billets used for captive consumption and production of Aluminium 
COMMR OF CENTRAL EXCISE, JAIPUR"· MAHA VIRALUMINIUM LTD. [CK TIIAKKERJ.] 425 
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y 
Irrigation Pipes. A notice was, therefore, issued to the assessee on January A 
2, I 996 to show cause why an amount of Rs. I, 16,56,476/- towards clearance 
of Aluminium Billets for captive consumption by suppressing the fact that 
such consumption was for manufacture of fully exempt products should not 
be recovered as duty and why penalty should not be imposed along with 
penalty. 
B 
4. By an order-in-original dated A

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