2009 (7) TMI 106 - SC - Central Excise

Meaning and Scope of term manufacture held that - the words manufacturing process in different statutes have different meanings. For instance, in the Central Excise Act, 1944, the word manufacture means bringing into existence a different commodity, though this is not the definition of manufacturing process in the Factories Act, 1948. We cannot apply the definition of manufacturing process in one Statute to another Statute. - Section 2(k), sub-clause (ii) of the Factories Act, 1948 states that pumping oil is a manufacturing process. Admittedly, the appellant does the work of pumping oil. When we go to a Petrol Pump for getting petrol or diesel, the petrol or diesel is in a tank and it does not on its own flow from the tank to the pipe and thereafter into the vehicle, but only by means of a pump by using power Factories Act, 1948 applied to appellants.

Summary

Issues:
1. Interpretation of the applicability of the Employees' State Insurance Act, 1948 to a petrol pump owner.
2. Determination of whether pumping oil constitutes a manufacturing process under the Factories Act, 1948.

Analysis:
Issue 1: The primary issue in this case revolves around the applicability of the Employees' State Insurance Act, 1948 to the appellant, who operates a petrol pump. The appellant challenged an order directing contribution under the Act from August 1993 to May 2000. The Act applies to factories, as per Section 1(4), and the key question is whether the appellant's establishment falls under this definition.

Issue 1 Analysis: The Act defines a "factory" as premises where a manufacturing process is carried out with the aid of power or without it, employing a certain number of persons. The Factories Act, 1948, defines "manufacturing process" to include pumping oil. The court emphasized the Literal Rule of Interpretation, stating that the Act applies to the appellant as pumping oil is considered a manufacturing process under the Factories Act. The court rejected arguments to consider the object and intention of the statute, emphasizing the clarity of the statutory language.

Issue 2: The second issue pertains to whether pumping oil qualifies as a manufacturing process under the Factories Act, 1948. The appellant's counsel argued for a broader interpretation based on the object and intention of the statute, while the respondent contended that the Literal Rule of Interpretation should be applied.

Issue 2 Analysis: The court determined that pumping oil falls within the definition of a manufacturing process as per the Factories Act, 1948. The court highlighted that the literal wording of the statute is clear, and as per Section 2(k)(ii) of the Factories Act, pumping oil is explicitly included as a manufacturing process. Consequently, the court upheld the respondent's decision to issue a notice for contribution and interest under the Employees' State Insurance Act, 1948.

Final Decision: The Supreme Court dismissed the appeal and reduced the rate of interest to 10% on the principal amount. The judgment underscores the importance of adhering to the Literal Rule of Interpretation in statutory interpretation, particularly in cases where the language of the statute is unambiguous and clear.