MIS. ESSEL PROPACK LTD. versus COMMISSIONER OF CENTRAL EXCISE, MUMBAI-ILL

Citation: [2011] 13 S.C.R. 91 · Decided: 09-11-2011 · Supreme Court of India · Bench: A.K. PATNAIK, ANIL R. DAVE · Disposal: Appeal(s) allowed

Judgment (excerpt)

[2011] 13 (ADDL.) S.C.R. 91 
MIS. ESSEL PROPACK LTD. 
v. 
COMMISSIONER OF CENTRAL EXCISE, MUMBAI-Ill 
(Civil Appeal Nos.5043-5045 of 2003) 
NOVEMBER 09, 2011 
[A.K. PATNAIK AND ANIL R. DAVE, JJ.] 
Central Excise Act, 1944: 
A 
B 
s.4 - Plastic caps put on plastic tubes - Inclusion of its c 
value in the plastic tubes manufactured and cleared from the 
factory of the assessee - Held: If the caps are manufactured 
separately and not in the same factory in which tubes are 
being manufactured, the caps cannot form part of the 
assessable value of the tubes manufactured and cleared from 0 
the factory - In the instant case, assessee manufacturing 
tubes on orders received from their customers and fixing 
plastic caps to the tubes in which case the value of the tubes 
fixed with caps are included in the assessable value of tubes, 
but in case such caps are supplied by the customers free of 
cost, such tubes are cleared without including the value of E 
caps in assessable value of the tubes - Commissioner did 
not record any clear finding as to whether for the tubes that 
were cleared by the appellant during the relevant periods in 
respect of which show cause notices were issued, the caps 
were supplied free of cost by the customers of the assessee F 
and such caps were fitted to the tubes manufactured in the 
factory of the assessee -
Matter remitted to the 
Commissioner to record clear finding as to whether for the 
tubes cleared during the three relevant periods, the caps were 
supplied by the customers of the appellant free of cost and G 
accordingly pass a fresh order 
Collector v. Metal Box of India Ltd. 1990 (45) E.L.T. A33 
(SC) - relied on. 
91 
H 
92 
SUPREME COURT REPORTS (2011] 13 (ADDL.) S.C.R. 
A 
Col. Tubes (P) Ltd. v. Collector 1994 (72) E.L.T. 342 (T) 
- approved. 
Union of India v. J.G. Glass Industries Ltd. 1998 (97) 
E.L. T. 5 (SC); Metal Box of India Ltd., Calcutta v. Collector 
B of Central Excise, Calcutta 1983 (13) E.L.T. 956 (T) -
referred to. 
c 
D 
E 
Case Law Reference: 
1990 (45) E.L.T. A33 (SC) relied on 
Paras 4, 8 
1994 (72) E.L.T. 342 (T), 
approved 
Para 4 
1998 (97) E.L.T. 5 (SC) 
referred to 
Paras 3, 6 
1983 (13) E.L.T. 956 (T) 
referred to 
Paras 4, 8 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 
5043-5045 of 2003. 
From the Judgment & Order c.ated 30.01.2003 of the 
Customs Excise & Gold (Control) Appellate Tribunal, West 
Zonal Bench, Mumbai in appeal nos. E/383V to 385N/98-Mum. 
A.R. Madhav Rao, Alok Yadav, Krishna Rao, Krishna 
Mohan Menon, Rajesh Kumar for the Appellant. 
Aruna Gupta, Sukumar Pattjoshi, P. Parmeswaran for the 
F 
Respondent. 
The following order of the Court was delivered 
ORDER 
G 
1. These appeals are filed under Section 35L(b) of the 
Central Excise Act, 1944 (for short ''the Act'), against the order 
dated 30th January, 2003 of the Customs, Excise & Gold 
(Control) Appellate Tribunal (for short "the Tribunal"), West Zonal 
Bench at Mumbai. 
H 
ESSEL PROPACK LTD. v. COMMISSIONER OF 
93 
CENTRAL EXCISE, MUMBAI-Ill 
2. The appellant manufactured plastic tubes in its factory 
A 
and supplied the same to Mis Colgate Palmolive (I) Ltd. (for 
short "Colgate"). After considering the reply to the show cause 
notices, the Commissioner of Central Excise, Mumbai Ill, 
passed an order dated 17th July, 1997, confirming the demand 
of excise duty amounting to Rs.54,30,713/- and imposing a 
B 
penalty of Rs.41,00,000/- under Rule 173-Q of the Central 
Excise Rules, 1944 and also directing the appellant to pay 
interest at the rate of 20% under Section 11-AB of the Act, on 
delayed payment of duty for the relevant periods, saying that 
the plastic caps, which were put on the plastic tubes, were not c 
included in the assessable value of the plastic tubes 
manufactured and cleared from the factory of the appellant. 
3. Aggrieved, the appellant filed appeals before the 
Tribunal and by the impugned order, the Tribunal confirmed the 
demand of duty and modified the penalty and interest imposed 
D 
by the Commissioner. The reason given by the Tribunal in the 
impugned order is that this Court in Union of India versus J.G. 
Glass Industries Ltd.,[1998 (97) E.L.T. 5 (S.C.)], had held that 
printing carried out on plain glass bottles in a different factory 
would not amount to "manufacture" under Section 2(f) of the Act, 
E 
but, if manufacture of bottles and printing thereon are carried 
out within the same factory, then the ultimate product, which 
happens to be excisable item 

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