9911796707
TMI Blog1985 (9) TMI 196X X X X Extracts X X X X X X X X Extracts X X X X ..... s in a mechanical device called disintegrator in their three factories located at different places and sort the resultant products into- (1) crushed bones (i.e. bones of dimensions ranging from 3/8" to 5/8", . (2) bone grist (smaller pieces of bones), (3) bone meal (granule like powder of bones), and (4) bone sinews (fleshy portions separated from the bones). They export some of the above products and sell the rest in India. The common issue involved in the two appeals before us is whether the above products were classifiable under Item 68 of the Central Excise Tariff or not. The period of dispute is between 1977 and 1979. 3. The Assistant Collector held that the goods were dutiable under Item 68. In his order relating to the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted bones had no basis. All that they did, they argued, was to crush the raw bones into bones of smaller dimensions and the raw bones remained raw bones. They relied on the Supreme Court judgment in the sales tax case of M/s. Pio Food Packers in which it was held that processing of pine apples into canned slices did not amount to a process of manufacture. They also relied on two High Court judgments, both under the Sales Tax law, one by the Allahabad High Court (26 STC 118)- Tilok Chand Prasan Kumar v. The Sales Tax Officer, Hathras, District Aligarh - and the other of the Madras High Court in their own case (47 STC 30). In the Allahabad case, it was held that broken Arhar Dal purchased by the petitioner from dal mills could not be said to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in which it had been held that the processes of crusting rock asbestos and subsequent sieving and grading into asbestos fibre amounted to manufacture". He stated that the respondents were converting bones into distinct commercial products by application of human labour and energy. He also relied on the recent judgment of the Supreme Court in the case of M/s. Empire Industries Ltd. etc. [1985 (20) E.L.T. 179 (S.C.)] in which it had been held that bleaching, dyeing and printing of cotton fabrics amounted to a process of manufacture. He argued that these processes in relation to fabrics were also physical processes in the same way as the processes undertaken by the respondents were. Regarding the second plea of the respondents, the learned r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, we observe that the products turned out by the respondents have distinct names, character and use which is different from those of the raw bones purchased by them. Bone meal is used as a fertiliser or soil nutrient. Crushed bones, bone grist, bone sinews etc. are used for the manufacture of gelatin, glue etc. Raw bones purchased by the respondents cannot be put to any of these uses without subjecting them to the processes which the respondents undertake. The products coming out as a result of these processes are bought and sold not only in the Indian market, but also in the international market. These products are, therefore, distinct commercial items, each having a definite name, character and use. We hold, therefore, that according to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndents. However, as already stated by us, the issue is conclusively decided by the well-known test laid down by the Supreme Court and we hold that according to that test, the processes undertaken by the respondents amounted to manufacture and the end products of these processes were goods which fell under Item 68 of the Central Excise Tariff. 7. Regarding the respondents plea of exemption, we find that Notification No. 176/77-C.E., dated 18-6-1977 contained various conditions as to the value of plant and machinery installed, the total value of clearances in the preceding financial year etc. The question whether the respondents fulfilled these conditions or not have not been gone into fully by the lower authorities even though the resp ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
