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TMI Blog1997 (12) TMI 166X X X X Extracts X X X X X X X X Extracts X X X X ..... The manufacturing process of flush door is as follows : First a timber frame of required dimensions is made with rails and stiles. They are enclosed by the frame is filled with wooden strips laid side by side. Two or three layers of veneers are pressed on each side of the core with an adhesive stratum between two layers in a hydraulic hot press. The doors are then cut to required size bringing them to full shape, sanded and got ready". As soon as the above process is complete the flush door comes into existence and duty is paid on the assessable value of these flush doors. The appellants sell at the factory gate about 90% of doors in the above condition. In some stray cases the customers place special orders for which the appellants make kick plate, vision hole cutting, rebate cutting and external lipping on the manufactured flush doors.The charges for these services rendered are being collected separately from the respective customers." The processes of kick plate fixing, vision hole cutting, rebate cutting and external lipping are described by them as under : (a) Kick Plate Fixing : According to the customers orders a plastic laminate of about 6" height is affixed on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The observation of the Hon ble Supreme Court in para 16 in this regard is as under : 16. Item 16-B in the First Schedule which we have earlier set out contains the relevant provisions which, as the High Court rightly pointed out, throw proper light on the question. On a careful consideration of the provisions contained in Item 16-B, we find it difficult to agree with the view expressed by the High Court. The main provision in Item 16-B indicates that plywood is liable to excise duty whether in Sheets, Blocks, Boards or the like. Sub-item (1) provides that plywood for tea-chests when cut to size, in panels or shooks and packed in sets will be charged duty at the rate of 10% ad valorem and sub-item (2) provides that in all other cases duty will be charged, at the rate of 15% ad valorem. A proper reading of this item indicates that plywood, except in case of tea-chests, is liable to be charged at the rate of 15% ad valorem whether in sheets, blocks, boards or the like. In other words, this item makes it clear that the excise duty is payable on plywood whether in sheets, blocks, boards or the like at the rate of 15% ad velorem, except in case of plywood for tea-chests; and, in case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whether or not bonded with natural or artificial resins or with similar binders: and artificial or reconstituted wood being wood shavings, woodchips, saw dust, wood flour or other lineous waste agglomerated with natural or artificial resins or other (organic binding substances, in sheets, blocks, boards or the like) : (i) Plywood for tea-chests when cut in panels or shooks and packed in sets; Ten per cent ad valorem. (ii) all others ......... Fifteen per cent ad valorem. The Hon ble Supreme Court, he pleaded took note of the fact that levy was on plywood and the stage for levy after cutting circles would not be relevant for the purpose of charging duty and the duty was to the paid at the anterior stage i.e. the form in which the plywood emerged. He also pressed in support of his plea the decision of the Tribunal in the case of Universal Luggage Manufacturing Co. Ltd v. CCE reported in 1990 (45) E.L.T 508. He has pleaded that in that case it has been held that items like wheel kit which was attached to suit cases as an optional accessory could not be taken into reckoning for the purpose of arriving at the assessable value of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the same into fabrics. No distinction can be made between unsized yarn and sized yarn, for the unsized yarn when converted into sized yarn does not lose its character as yarn. The Learned Counsel therefore pleaded that value of the items enumerated above would not be includible and assessment is required to be done based on the value of 99% of the flush doors which were cleared from the factory, without these additional features. 3. Shri V.Thyagaraj, the learned SDR for the department urged the following points :- (1) The issue involved before us is not classification but of valuation and in view of the background therefore, the value is to be arrived at based on condition in which the goods leave the factory of the appellants and the price at which they sell the doors. (2) For determining the value for assessment, the features which enriched the value should be taken into consideration. He has pleaded that the appellants can be taken to have manufactured two types of flush doors i.e. providing the key hole and lipping attached and without these features. In this connection he pointed out that in the case of castings, the same were assessed after including the cost of m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tured was the spindle stage as the unsized yarn did not lose its character as yarn after it was sized and observed it was doubtful whether sizing could be considered as a process of manufacture. The case law cited were not in the context of Section 4. The issue in our view stands concluded by the judgment of the Hon ble Supreme Court in the case of Metal Box India Ltd v. CCE, Madras reported in 1995 (75) E.L.T. 449 (SC) = 1996 (66) ECR 657 (SC). The facts in the case as set out in the order of the Hon ble Supreme Court are as under : The respondent, Metal Box Company of India Limited, were manufacturing tubes popularly known as aluminium collapsible and rigid tubes . The collapsible tube is a cylinder of pliable metal. These tubes were originally manufactured from lead but later they were being manufactured predominantly from aluminium. The respondent was manufacturing the said tubes from aluminium by extrusion, i.e., by forcing slugs or lumps of aluminium through a die under pressure. This process is called Extrusion process. After the tube is delivered from the extrusion press, it is trimmed to a correct length and its nozzle is threaded to the appropriate specification. Accor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... levant tariff item, viz. Tariff Item 27 in the Schedule to the Central Excise Act, as it stood at the relevant time, read as follows : ALUMINIUM (a) (i) In any crude from including ingots, bars, blocks, slabs, billets, shots and billets. (ii) Wire bars, wire rods and castings, not otherwise specified. (b) Manufactures, the following : Namely, plates, sheets, circles and strips in any form or size, not otherwise specified. (c) Foils, that is a product of thickness (Excluding any backing) not exceed in 0.15 millimetres. (d) Pipes and tubes, other than extruded pipes and tubes. (e) Extruded shapes and sections including extruded pipes and tubes. Subsequently, clause (f) has been added in the above Tariff Item, which reads: (f) Containers, plain, lacquered or printed or lacquered and printed. The definition of manufacture, as inserted by the Finance Act (No. 25) of 1975 with effect from March 1, 1975 reads, insofar as is relevant, thus: (2f) Manufacture includes any process incidental or ancillary to the completion of a manufactured process; and ............ Section 4 provides that where the duty of excise is chargeable with reference to value, such value shall, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e said earlier, the law in that behalf is enunciated in Bombay Tyre International and Madras Rubber Factory Limited.] For these reasons, it is also not possible for us to agree with the decision of the Gujarat High Court in Extrusion Process Private Limited. The Hon ble Supreme Court has gone on to further hold as under in that case. The contention is that the Finance Bill introducing clause (f) in Tariff Item 27 was introduced in Parliament on June 18, 1980 and that the Bill became law on passing of the Finance (No. 2) Act, 1980 with effect from August 25, 1980. It is submitted that though a declaration as provided by Section 3 of the Provisional Collection of Taxes Act, 1981 was made while introducing the said Bill in Parliament, such declaration cannot enable the excise authorities to include the charges of printing and lacquering in the assessable value of the said tubes and rigid cans. Not only is this argument untenable in law but it does not actually arise for consideration in view of our holding in Civil Appeal No. 100 of 1981, that even apart from the said clause (f), the said charges are includible in the assessable value. It is clear from the above that the price ..... X X X X Extracts X X X X X X X X Extracts X X X X
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