TRIVENI ENGINEERING AND INDUSTRIES LTD. AND ANR. versus COMMISSIONER OF CENTRAL EXCISE AND ANR.

Citation: [2000] SUPP. 2 S.C.R. 199 · Decided: 08-08-2000 · Supreme Court of India · Bench: S.S.M. QUADRI · Disposal: Appeal(s) allowed

Judgment (excerpt)

.... 
TRIVENI ENGINEERING AND INDUSTRIES LTD. AND ANR. 
A 
v. 
COMMISSIONER OF CENTRAL EXCISE AND ANR . 
AUGUST 8, 2000 
[SYED SHAH MOHMMED QUADRI AND SHIVARAJ V PATIL, JJ.] 
Central Excises and Salt Act, 1944 : 
Section 3-Excise duty-Exigibility to-Twin condition-Turbo alterna-
tor-Held, to attract excise duty an article must satisfy the twin conditions of 
being (i) excisable goods and (ii) produced or manufactured in India-Turbo 
alternator does notfu!fil the.first condition-Hence excise duty cannot be levied 
on it-Central Excise Tar({{ Act, 1985-Heading 85.02. 
Manufacturing process-Meaning of-Turbo alternator-Assessee pro-
duced turbo alternator by fixing a steam turbine on to an alternator perma-
nently placed on a pla(form at the customers premise:.~Held, when a market-
able commodity emerges with a distinctive name, character or use it amounts 
to a manufacturing process-Hence, creation of turbo alternator is a manufac-
turing process. 
Excisable goods-Determination of-Tests-Turbo alternator-Held, if 
an article does not find a place ea nomine in the schedule to the Excise 
Act it is liable to excise duty only when it is shown that it is Mobile and 
marketable-Otherwise, it is an immovable property-Whether an article is 
permanently fastened to the earth require determination of both intention as 
well as factum of fastening to earth-Turbo alternator answers the test of 
permanency-Hence, not liable to excise duty-Transfer of Property Act, 1882-
S.3-General Clauses Act, 1897-S.3(25)-Harmonized System qf Nomencla-
ture-Explanatory Notes to Heading 85.02 of Central Excise Tariff Act, 1985. 
Words and Phrases : 
B 
c 
D 
E 
F 
"Excisable goods "-Meaning of-Jn the context qf S.2( d) of the Central 
G 
Excises and Salt Act, 1944. 
The appellants-assessees dealt in turbo alternator, which had two 
components; (i) steam turbine; and (ii) complete alternator (also called 
'Generator'). Of them, the appellants manufactured steam turbine in their 
factories and excise duty was paid on them under the Central Excises and 
H 
199 
200 
SUPREME COURT REPORTS 
[2000] SUPP. 2 S.C.R. 
A 
Salt Act, 1944. The appellants purchased duty paid complete alternators, 
which were delivered at the premises of the customer. 
The respondent-Revenue confirmed the demand of excise duty on 
the turbo alternators under Heading 85.02 of the Central Excise Tariff 
Act, 1985. The appeals filed by the appellants-assessees were dismissed by 
B 
the Customs, Excise and Gold (Control) Appellate Tribunal. Hence this 
appeal. 
c 
D 
E 
F 
G 
On behalf of the appellant-assessee it was contended that in combin-
ing steam turbine and alternator, no manufacturing process was involved; 
that the process consisted of combining and fixing of the two components 
permanently on a platform raised at the premises of the customers and 
thus what emerged was not goods but an immovable property. 
Allowing t:te appeal, this Court 
HELD : 1.1. To attract exigibility of excise duty, an article must 
satisfy the twin conditions of being (i) excisable goods; and (ii) produced or 
manufactured in India. [204-D] 
1.2. In order to bring into existence a turbo alternator, a platform, in 
which pockets are provided, is constructed at the site. The steam turbine 
from the assessees' factory and the alternator from other factories are 
transported to the site. The steam turbine is placed on the platform, which 
works as the foundation, and then, after levelling, it is fastened with 
foundation bolts into the pocket. So also, the alternator is placed and 
bolted to the steam turbine through a high speed coupling between the 
steam turbine outer-shaft and alternator shaft and they are aligned 
properly. After ensuring that there is no movement of the alternator 
pedestal, other accessories are installed at their respective places. Having 
regard to this process, the Customs, Excise and Gold (Control) Appellate 
Tribunal (CEGAT) rightly held that the assessees manufactured turbo 
alternators. [204-E-FJ 
2. Where an activity results in emergence of a new marketable 
commodity with a distinctive name, character or use, it cannot but be a 
manufacturing process. Therefore, the process involved in fixing steam 
turbine and alternator and in coupling and aligning them in a specified 
manner to form a turbo alternator, a new commodity, is nothing but a 
H 
manufacturing process. [205-D-F] 
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, 
7 
TRIVENI ENG. AND INDUSTRIES LTD. v. C.C.E. 
201 
Name Tuleman Mam!facturers Pvt. ltd. v

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