IMPRESSION PRINTS versus COMMISSIONER OF CENTRAL EXCISE, DELHI-I

Citation: [2005] SUPP. 2 S.C.R. 904 · Decided: 24-08-2005 · Supreme Court of India · Bench: S.N. VARIAVA · Disposal: Dismissed

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Judgment (excerpt)

A 
B 
c 
IMPRESSION PRINTS 
v. 
COMMISSIONER OF CENTRAL EXCISE, DELHI-I 
AUGUST 24, 2005 
(S.N. VARIAVA AND TARUN CHATTERJEE, JJ.] 
Central Excises and Salt Act, 1944: 
Section 2(/)-Manufacture-Tarif! Item 6301-Notification No. 65187-
CE dated 1.3.1987-Exemption under-Assessee manufactured printed bed 
sheets, bed covers and pillow cases-Show cause notice issued to assessee 
as to why duty and penalty be not levied on these items-Under the 
Notification these items bore 'Nil' rate of duty "if made without the aid of 
power "-Hence, assessee claimed benefit of exemption under the Notification-
D The assessee 's claim was negatived on the ground that while manufacturing 
these items the assessee mixed colour with the help of a colouring machine 
which was operated with the aid of power-Therefore, penalty and duty was 
levied on the assessee-Validity of-Held: If power is used for any of the 
numerous processes that are required to turn the raw material into a finished 
E article then the manufacture would be with the aid of power-Hence, assessee 
not entitled to benefit of notification-Duty and penalty rightly levied-
Central Excise Tariff Act, 1985. 
F 
Words & Phrases: 
"Manufacture"-Meaning of-Jn the context of S. 2(/) of the Central 
Excises and Salt Act, 1944. 
The appellant-assessee manufactured items like bed sheets, bed covers 
and pillow cases. The assessee was issued a show-cause notice as to why 
G duty and penalty be not levied on these items. The assessee claimed that 
these items bore a 'Nil' rate of duty under the Notification No. 65/87-CE 
dated 1.3.1987; that the assessee was entitled to the benefit of the Notification 
and, therefore, it was not liable to pay duty and penalty. These items fell 
under Tariff Item No. 6301 which consisted of "made up textile articles" 
H and bore 'Nil' rate of duty "if made without aid of power". 
904 
IMPRESSION PRINTS v. COMMR. OF CENTRAL EXCISE, DELHI-I 
905 
The assessee's claim was not accepted on the ground that in the A 
process of manufacturing printed bed sheets, bed covers and pillow cases 
the assessee mixed colour with the help of a colour mixing machine which 
was operated with the aid of power. The assessee was, therefore, called 
upon to pay duty. Penalty was also imposed on the assessee. The Central 
Exdse, Customs and Gold (Control) Appellate Tribunal dismissed the B 
appeal filed by the assessee. Hence the appeal. 
Dismissing the appeal, the Court 
HELD: I. The word "manufacture" in Section 2(f) of the Central 
Excises and Salt Act, 1944 includes any process incidental or ancillary to the C 
completion ofa manufactured product. This puts it beyond any possibility 
of controversy that if po,ver is used for any of the numerous processes that 
are required to turn the raw material into the finished article then the 
manufacture will be with the use of power. If power is used any stage then 
the argument that po\ver is not used in the \\'hole process of manufacture, 
using the word in its ordinary sense will not be available. The expression "in 
the manufacture" would normally encompass the entire process carried on 
for converting raw material into goods. If a process or activity isso integrally 
connected to the ultimate production of goods so that but for that process, 
manufacture or processing of goods is impossible or commercially 
inexpedientthen the goods required in that process would be covered by the 
expression "in the manufacture or'. It is not necessary that the word 
"manufacture" would only refer to the stage at which the ingredients or 
commodities are used in the actual manufacture of the final product. The 
word "manufacture" does not refer only to the using of the ingredients 
which are directly and actually needed for making the goods. It is also 
settled law that to avail of an exemption the party has to strictly comply with 
the exemption Notification. Therefore, the wording of the Notification 
becomes relevant. The Notification grants exemption to "made up textile 
articles" only "if made without the aid of power". These words mean the 
same thing as "in the manufacture of which no power is used". It is not 
possible to accept the submission that the word "made" only refers to the 
stage of manufacture from cotton fabrics to printed bed sheets, bed covers 
and pillow cases. [914-E, F, G, H; 915-A, BJ 
CCE v. Dhvani Terefabs (Exports) Pvt. ltd, (2001) 132 ELT 604, CC£ 
v. Garware Wall Ropes ltd, (1999) 111 ELT 498, CCE v. Mysore Spin

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