M/S. B.P.L. INDIA LTD. versus COMMISSIONER OF CENTRAL EXCISE, COCHIN

Citation: [2002] 3 S.C.R. 834 · Decided: 07-05-2002 · Supreme Court of India · Bench: N. SANTOSH HEGDE · Disposal: Dismissed

Judgment (excerpt)

A 
M/S. B.P.L. INDIA LTD. 
v. 
COMMISSIONER OF CENTRAL EXCISE, COCHIN 
MAY 7, 2002 
B 
[N. SANTOSH HEGDE AND SHIVARAJ V. PATIL, JJ.] 
Central Excises and Salt Act, i 944-Section 2(/)-Excise duty-levy 
of-On assembly of imported kits of components into VTRslcolour monitors 
C by using fastners-Countervailing duty already levied under Tariff item 68 
on disassembled kits-Held, duty leviable on the end product since the 
process of assembly constituted the process of manufacture. 
Section ii A-Notice-issuance of-limitation-Plea that extended 
period not available-Held, in view of the conduct of assessee longer period 
D Qf limitation available. 
100 Kits of VTR with colour monitors were imported by appellant-
assessee in disassembled condition and the same were subjected to 
countervailing duty under tariff item 68. 
E 
Appellant assembled the goods into VTRs and colour monitors at their 
F 
factory and cleared the sets without payment of duty, without intimation and 
without observing central excise formalities. 
Superintendent issued show cause notices asking the appellant as to why 
duty be not levied on the sets. Thereafter another show cause notice was issued 
by Collector. Appellant replied the same. 
Collector confirmed the demand. Appeal before Customs, Excise and Gold 
(Control) Appellate Tribunal was dismissed on the ground that the appellant 
was liable to pay duty on the end product as assembly or imported kits of 
G components into VTRs/colour monitors constituted the process of manufacture. 
H 
In view of delay in giving necessary intimation to the department, before 
clearing the products, it held that longer period of limitation was available. 
In appeal to this Court, appellant contended that fastening disassembled 
VTRs/colour monitors did not amount to manufacture within meaning of Section 
834 
-
B.P L. INDIA LTD. 11. COMMISSIONER OF CENTRAL EXCISE 
835 
2(Qof Central Excises and Salt Act, 1944; that once countervailing duty was A 
paid by them, they were not liable to pay the duty on the end product; that demand 
of duty was barred by limitation and extended period of limitation was not 
available to the Revenue; and that Collector could not have issued more notices 
on the same sets of facts when earlier proceedings were not completed. 
Revenue contended that in view of the process involved in assembly, B 
appellant manufactured VTRs with colour monitors; that their conduct in 
avoiding or delaying in giving reply to the show cause notices and not 
intimating the manufacture and clearance of the goods without completing 
Central Excise formalities lacked bona fide; and that since the third notice 
was in continuation of the earlier two notices, it could not be said that Collector C 
had no jurisdiction to continue the proceedings and pass adjudicatory orders. 
Dismissing the appeal, the Court 
HELD: I.I. A question as to when a manufacture of product takes place 
within the meaning of Section 2(0 of the Central Excises and Salt Act, 1944 D 
is a mixed question of law and fact. The nature and thC extent of processes 
may vary from case to case. When a change takes place and a new ana distinct 
" 
article comes into existence known to the consumers and the commercial 
community as a commercial product, which can be no longer regarded as the 
original commodity, such a change constitutes a process of manufacture. 
E 
(839-G( 
Union of India v. Delhi Cloth and General Mills, (1977) I ELT (JI 99) 
referred to. 
1.2. The Collector as well as the Tribunal has rightly recorded a finding F 
of fact based on the material placed on record that the assembly of imported 
kits of components into VTRs/colour monitors by using the fasteners 
constituted the process of manufacture. The imported kits of components of 
VTRs and colour monitors in SKD condition were items falling under Item 68 
for levy of countervailing duty. By the process undertaken by the appellant a 
change is brought about facilitating the utility of the product for which they G 
were meant. In other \Vords, pursuant to the process, a transformation has 
taken place at the hands of the technical experts of skilled persons and not by 
laymen, which made the product to have a distinct character and use. Such 
product ofVTR/colour monitor as finished product was classified under Item 
37 BB. The Tribunal was right in its conclusion that the appellant was liable H 
836 
SUPREME COURT REPORTS 
[2002] 3 S.C.R. 
A to pay duty on the end product. 1840-C

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