1986 (6) TMI 40 - HC - Central Excise

Summary

Issues:
1. Whether bagasse is considered a manufactured product under the Central Excises and Salt Act, 1944.
2. Whether the petitioner is entitled to exemption under specific notifications regarding bagasse classification.

Analysis:

Issue 1:
The petitioner argued that bagasse, a by-product of sugarcane crushing, is not a manufactured product subject to excise duty. The court analyzed the definition of 'manufacture' under section 2(f) of the Act, which includes any process incidental to the completion of a manufactured product. The court noted that the transformation of sugarcane into sugar and bagasse involves a change in identity, with bagasse being commercially distinct. Referring to a Supreme Court case, the court emphasized that any transformation resulting in a commercially different product constitutes 'manufacture' for excise purposes. Therefore, the court rejected the petitioner's contention that bagasse is not a manufactured product.

Issue 2:
The petitioner also claimed exemption under specific notifications, arguing that bagasse should be considered an intermediate good or component part of any product. However, the court found that bagasse does not qualify as an intermediate good or component part, as it is an independent by-product of sugarcane processing. The court clarified that bagasse does not merge with the final product, sugar, during the manufacturing process. Consequently, the court dismissed the petitioner's claim for exemption under the notifications.

In conclusion, the court dismissed the Writ Petition, ruling against the petitioner on both issues and ordering no costs to be paid.