MULTIMETALS LTD. versus ASSISTANT COLLECTOR, CEN1RAL EXCISE, KOTA AND ORS.

Citation: [1991] SUPP. 3 S.C.R. 292 · Decided: 10-12-1991 · Supreme Court of India · Bench: K. JAGANNATHA SHETTY · Disposal: Dismissed
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Judgment (excerpt)

A 
MULTIMETALS LTD. 
v. 
ASSISTANT COLLECTOR, CEN1RAL EXCISE, KOTA AND ORS. 
DECEMBER 10, 1991 
B 
[K. JAGANNATHA SHETIY, V, RAMASWAMI AND 
YOGESHW AR DAY AL, JJ.] 
Central Excises and Salt Act, 1944/Central Excise Rules, 1944, s.3, First 
Schedule-Item 26A/r.8(1) & Notification dated 28.12.1963-Copper, copper 
alloys and copper pipes .and tubes-Excise duty-Exemption on copper pipes 
C and tubes in reference to duty paid copper and copper alloys used in the 
manufacture-Extent of-Whether includes "manufacturing loss" also. 
Under s.3 of the Central Excises and Salt Act, 1944, excise duty is 
payable on copper and copper alloys in any crude form as also pipes and 
tubes made thereof, at the rates set forth in Item 26A of the First Schedule 
D to the Act. The Central Government Notification dated 28.12.1963 ex-
empted from duty, pipes and tubes of copper and copper alloys to the 
extent equivalent to the duty already paid on the copper and copper alloys 
used in crude form in their manufacture. 
' 
The appellant-Company claimed exemption on the quantity of the 
E raw material used by it in the manufacture of pipes and tubes including 
the manufacturing loss contending that the Notification intended to give 
relief to the extent of the duty already paid on the copper and copper alloys 
in its crude form used in the manufacture. The Department was of the 
view that the exemption from excise duty was available on the weight of 
F 
rmished products and .not on the entire quantity of copper used in the 
manufacture of pipes and tubes. 
The Appellate· Aut~~rity-Collector of Central Excise-found that 
there was a manufacturing loss. However, the High Court held that the 
exemption was to be calcidated on the basis of the weight of the raw 
G material actually used for the purpose of manufacture of pipes and tubes. 
Aggrieved, the appellant-manufacturer filed the appeal before this Court. 
On the questi~n: whether the duty referable to the portion of the 
copper and copper alloys used in crude form which is loSt in the manufac-
~ 
. 
turing process also should'get rebate while assessing for excise duty on the 
H pipes and tubes of copper and copper alloys, 
.292 
MULTIMET ALS v. ASTT. COLLECTOR 
293 
Dismissing the appeal, this-Court, 
HELD: 1. Even the manufacturing loss will have to be taken into 
account in determining the relief to be provided under the Notification 
dated 28.12.1963. [p. 296 EF] 
A 
The 'manufacturing loss' forms part of the raw material "used" in 
B 
the manufacture though not reflected in the final product. By the Notifi-
cation the relief to be given to the manufacturer was in respect of the duty 
~lready paid on the raw material used in the manufacture of the final 
product. The relief has to be given to the extent of the duty paid on the 
input material and not with reference to the quantity which ultimately 
forms part of the final product. [p. 296 D-E] 
C 
Mis Swadeshi Polytex Ltd. v. Collector of Central Excise, [1990] 2 SCC 
358, relied on. 
2. Due to cutting the copper wire, melting in electric furnaces and re-
melting in the process of manufacture, a portion of the copper and copper 
alloys in its crude form which was used as the raw material is permanently 
lost. [p. 295G] 
· 
Duty paid copper and copper alloys in crude form are used in the 
manufacture of pipes and tubes. Rebate is to be equivalent to the duty 
already paid on copper and copper alloys in its crude form, that is to say 
on the input. The idea seems to be that to the extent of the duty paid on 
the raw material used exemption-has to be given and that has no reference 
to what ultimately found part of the finished product. [p. 296 BC] 
It is the duty paid on the input material that is relevant and not the 
duty referable to the ultimate component of the final product. [p. 296 CD] 
3. It is for the manufacturer who claims the relief to prove the loss. 
There are also scientific methods of arriving at the loss. [p. 296 FG] 
D 
E 
F 
CIVIL APPELLA1E JURISDICTION: Civil Appeal No. 4918of1985. G 
From the Judgment and Order dated 27.2.1981 of the Rajasthan High 
Court in D.B. Civil Writ Petition No. 1156 of 1971. 
Harish N. Salve, S.K. Jain, Vibhu Bakhru and S.D. Sharma for the 
Appellant. 
H 
294 
SUPREME COURT REPORTS 
' [1991]" SUPP. 3 S. C.R. 
A 
M. Gaurishankar Murthy, A.K. Srivastava, P.Parmeshwaran(NP) and 
C.V. Subba Rao(NP) for the ,Respondents. 
The Judgment of the Court was delivered by 
V. RAMASW AMI, J. Under section 3 o
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