LexMARUTI SUZUKI INDIA LTD. versus COMMNR. OF CENTRAL EXCISE, NEW DELHI
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A B c [2015]5S.C.R.180 M/S. MARUTI SUZUKI INDIALTD. v. COMMNR. OF CENTRAL EXCISE, NEW DELHI (CivilAppeal No. 8190of2003) MARCH 12, 2015 [A. K. SIKRI AND R. F. NARIMAN, JJ.] Central Excise Rules, 1944 - r. 57F - Levy of duty- On the products (spare parts of motor vehicles i.e. bumpers and grills)-Aftertheirprocessing i.e. Electro Deposition (ED) Coating- On the ground that the process of ED Coating led D to value addition - Held: In order to attract the charging section i.e. s. 3 of Central Excise Act, there must be 'manufacture' - The 'input' that was removed from the factory for home consumption i.e. 'bumpers' and 'grills' continue to remain the same 'inputs' even after its processing i.e. ED E Coating - Thus, the processing of the inputs would not amount to 'manufacture' - Mere value addition would not amount to 'manufacture' - In such cases proviso to r. 57F (ii) would apply - Therefore demand of differential duty on the products was not correct - Central Excise Act, 1944 - ss. 3 F and4. Disposing of the appeal, the Court HELD: 1.1 It is clear, as is apparent from the G opening words of Section 4 of the Central Excise Act, 1944, that there must first be manufacture in order to attract the charging section,. namely Section 3 of the Central Excise Act, 1944 before one comes to valuation of goods under Section 4 of the 1944 Act. [Para 19] [195- H G-H] 180 MARUTI SI JZUKI INDIALTD. v. COMMNR. OF CENTRAL 181 EXCISE, NEW DELHI 1.2 On the facts of the present case, it is found A that for the purposes of the proviso to Rule 57F(ii), the inputs that were not ultimately used in the final product but were removed from the factory for home consumption remain the same despite ED coating and consequent value addition. On account of mere value B addition without more, it would be hazardous to say that manufacture has taken place, when in fact, it has not. It is clear, therefore, that the inputs procured by the appellants in the present case, continue to be the same C inputs even after ED coating and that Rule 57F(ii) proviso would therefore apply when such inputs are removed from the factory for home consumption, the duty of excise payable being the amount of credit that has been availed in respect of such inputs under Rule 57 A. [Para o 20) [196-A-E] 1.3 Thus, on the true construction of Rule 57F(1) of Central excise Rules, 1944, it would be clear that the "input" that is removed from the factory for home E consumption were bumpers, grills, etc., being spare parts of motor vehicles procured by the appellant. ED coating which would increase the shelf life of the spare parts and provide anti-rust treatment to the same would not convert these bumpers, etc., into a new commodity F known to the market as such, merely on account of value addition. [Para 9) [188-G-H] Union of India v. Delhi Cloth and General Mills Co. Ltd. 1977(1) E.L.T. 199; Commissioner of Central G Excise, New Delhi v. S.R. Tissues Pvt. Ltd. 2005 (186) E.L.T. 385; Union of India v. J.G Glass Industries Ltd. 1998 (97) E.L.T. 5- relied on. Siddhartha Tubes Ltd. v. Commissioner of Customs & H 182 SUPREME COURT REPORTS [2015) 5 S.C.R. A Central Excise, Indore (M.P.) (2005) 13 SCC 559: 2005 (5) Suppl. SCR 851; Brakes India Limited v. Superintendent of Central Excise and Ors. 1 9 9 7 (10) sec 717 - distinguished. B Sidhartha Tubes Limited v. Collector of Central Excise 2000 (10) sec 194 - referred to. 2. It is not correct to say that the drift of the rules 57F(3) and (3A) shows that where inputs are removed to c a place outside the factory when they are only partially processed, then when they come back after the process, the value addition made on account of such processing would be chargeable to duty under sub-Rule 3A. Such interpretation would be adding words to Rule 57F(1) to D the effect that value additions made to inputs covered by sub-rule (ii) would also suffer duty even if there is no manufacture. Further, sub-rule (3) and (3A) apply to an entirely different factual scenario, and it is only after all the conditions under the said sub-rules are met, that duty E attributable to inputs contained in partially processed inputs, would then become dutiable. [Para 22 and 23) [198-G; 199-A-B] Case Law Reference F 1977 (1) E.L.T.199 relied on. Para 10 2000 (10) sec 194 referred to. Para 11 2005 (186) E.L.T. 385 relied on. Para 13 G 1998 (97) E.L.T. 5 relied on. Pa
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