M/S. SERVO-MED INDUSTRIES PVT. LTD. versus COMMISSIONER OF CENTRAL EXCISE, MUMBAI.

Citation: [2015] 6 S.C.R. 690 · Decided: 07-05-2015 · Supreme Court of India · Bench: A.K. SIKRI, R.F. NARIMAN · Disposal: Appeal(s) allowed

Cited by 2 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

[2015] 6 S.C.R. 690 
A 
MIS. SERVO-MED INDUSTRIES PVT. LTD. 
B 
v. 
-WMMISSIONER OF CENTRAL EXCISE, MUMBAI. 
(Civil Appeal No.583 of 2005) 
MAYO?, 2015 
[A.K. SIKRI AND R. F. NARIMAN, JJ.] 
C 
Central Excise Act, 1944 - s. 2(f) - Excise duty -
Payment of - Assessee engaged in purchase of syringes 
and needles in bulk from open market and thereafter 
sterilizing them and putting one syringe and needle in an 
unassembled form in a pouch and selling them - Syringe 
D and needle capable of use once and thereafter were 
disposable - Pouches bore brand name belonged to 
assessee -
Excise duty previously imposed on the 
manufacturer of syringes and needles - Levy of excise duty 
again on assessee as a result of sterilization - Held: 
E Disposable syringe and needle which are used for medical 
purposes is a finished product in itself - Sterilization does 
not lead to any value addition in the said product - All that 
the process of sterilization does is to remove bacteria which 
settles on the syringe's and needle's surface, which process 
F does not bring about a transformation of the said articles into 
something new and different - Neither the character nor the 
end use of the syringe and needle has changed post-
sterilization -
Syringe and needle retains its essential 
character as such tjven after sterilization - Thus, the order 
G passed by the tribunal that manufacturing has taken place 
and excise levy is attracted, set aside. 
Allowing the appeal, the Court 
H 
690 
SERVO-MED INDUSTRIES PVT. LTD. v. COMMNR.OF 
691 
CENTRAL EXCISE, MUMBAI. 
HELD: 1. The four categories as regards A 
manufacture of goods, transformation of goods are 
stated below: 
(i) Where the goods remain exactly the same even 
after a particular process, there is obviously no B 
manufacture involved. Processes which remove foreign 
matter from goods complete in themselves and/or 
processes which clean goods that are complete in 
themselves fall within this category. 
(ii) Where the goods remain essentially the same after 
the particular process, again there can be no 
manufacture. This is for the reason that the original article 
continues as such despite the said process and the 
c 
changes brought about by the said process. 
D 
(iii) Where the goods are transformed into something 
different and/or new after a particular process, but the 
said goods are not marketable. 
(iv) Where the goods are transformed into goods E 
which are different and/or new after a particular process, 
such goods being marketable as such. It is in this 
category that manufacture of goods can be said to take 
place. 
F 
The instant case falls Within the first category. This 
is a case of manufacture of disposable syringes and 
needles which are used for medical purposes. These 
syringes and needles, like in the J.G. Glass case and 
unlike the Brakes India case, are finished or complete in G 
themselves. They can be used or sold for medical 
purposes in the form in which they are. The fact that 
medically speaking they are only used after sterilization 
would not bring this case within the ratio of the Brakes H 
692 
SUPREME COURT REPORTS 
[2015] 6 S.C.R. 
A India case. All articles used medically, surgicai 
operations, must of necessity first be sterilized. [Para 27, 
28] (710-8-H; 711-A-C] 
2. The added process of sterilization does not mean 
B that such articles are not complete articles in themselves 
or that the process of sterilization produces a 
transformation in the original articles leading to new 
articles known to the market as such. A surgical 
equipment such as a knife continues to be a surgical 
C knife even after sterilization. If the Departmentw.ere right, 
every time such instruments are sterilized, the same 
surgical instrument is brought forth again and again by 
way of manufacture and excisable duty is chargeable 
on the same. This would lead to an absurd result and fly 
D in the face of common sense. If a surgical instrument is 
being used five times a day, it cannot be ,;aid that the 
same instrument has suffered a process which amounts 
to manufacture in which case excise duty would be liable 
to be paid on such instruments five times over on any 
E given day of use. Further, the disposable syringe and 
needle in question is a finished product in itself. 
Sterilization does not lead to any value addition in the 
said product. The process of sterilization removes 
F bacteria which settles on the syringe's and needle's 
surface, and does not bring ab

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