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TMI Blog1984 (2) TMI 344X X X X Extracts X X X X X X X X Extracts X X X X ..... ntly, a notice requiring the Appellant to show cause as to why the differential duty specified in annexure attached to the notice should not be realised from the Appellant and why the concession under Notification No. 119/75, dated 30th April, 1975 should not be refused; (d) in adjudication, it was held that the Acetic Anhydride manufactured out of Acetic acid by the Appellant is altogether a different product and has, accordingly, to be assessed in terms of Item 68 of the First Schedule to the Act, without affording any benefit of exemption under the aforesaid Notification No. 119/75; (e) an appeal filed by the Appellant was rejected on the ground that the provisions of the aforesaid notification cannot be made applicable because the article received by the job worker is not returned as such after undergoing manufacturing process in the premises of the job worker; (f) the instant Revision heard as an Appeal was the sequel. 2. To contentions advanced before us were that- (a) When, in terms of the notification, an article undergoes a manufacturing process with the job worker, it cannot retain its original identity, since a manufacturing process necessarily involves a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d following 1978 E.L.T. 533 that cutting of wire nails out of wires supplied in running lengths was a job work eligible for the benefit of Notification No. 119/75. 6.(a) In 1978 E.L.T. 533 (Anup Engineering Ltd. v. Union of India), duty paid article like e.g. tin plates, sheets, tubes, pipes etc. were delivered to the Petitioner for converting them into equipments and components on job work basis. Construeing the aforesaid notification, it was held, inter alia, that the article supplied by the customer has to undergo manufacturing process as intended. It is obvious, in the context of the excise law, that, unless a new article known to trade emerges after the manufacturing process is completed, Excise Duty cannot be levied at all. That is the very basis of taxation under the excise law. In order to exempt job workers from payment of duty except to the extent of duty on the job work charges, this explanation to the Notification makes it clear that the article which undergoes manufacturing process at the hands of the job worker, must be supplied by the customer and the only thing which the job worker has to do is to subject that article supplied by the customer to the intended man ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Act, manufacture has been inclusively defined so as to bring within its ambit any process incidental or ancillary to the completion of a manufactured product. (b) It is well settled that an inclusive definition is made use of, to enlarge the words or phrases occurring in the body of the statute; and when it is so used, these words or phrases must be construed as comprehending not only such things as they signify according to their natural import but also those things which the interpretation clause declares that they shall include (per Lord Watson in Dilworth v. Commissioner of Stamps (1890) A.C. 99 at pp. 105, 106 and cited in p. 270 of Maxwell on Interpretation of Statutes- 12th Edition); (c) It cannot, however be disputed that if after such an inclusive definition, the things legislatively declared to be included within the definition are mentioned in contradistinction to those which the word defined signify according to its natural import, in any particular context, then, it cannot but mean and imply anything other than what it primarily and naturally means and not the things sought to be included, despite the inclusive definition. Thus, for example, if retail tra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rusted for undergoing the manufacturing process, should, itself, be returned by the job work after it has undergone the intended process. If, on the contrary, the process to be undergone really amounted to manufacture , involving a substantial change in the article given for job work, it is altogether inconceivable how the selfsame article can be returned by the job worker; (g) In terms of the explanation in the notification, therefore,- (i) There has to be an article i.e., a manufactured product that has already come into existence. (ii) it is that article that is entrusted to a job worker for a process incidental or ancillary to the completion thereof; (iii) it is that identical article that is to be returned by the job worker after it has undergone the intended process; (h) While it is true that, ordinarily, manufacture implies a change resulting in finished goods different from the original and having a distinct name, character and use, a process incidental or ancillary to manufacture for completion of the manufactured product does not involve any such change. It is not difficult to conceive of such incidental or ancillary processes that do not result in any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e basis of the job work charges only and not the value of the excisable goods, as per Item 68 of the First Schedule, read with Section 4 of the Act, with the result that they are altogether rendered nugatory. 9. We had previously desired the issues of construction and applicability of the aforesaid Notification to a larger Bench in the case of M/s. National Organic Chemical Industries Ltd., Bombay. In making the said reference however, the conflict between the decision in the Waldies case and 1983 E.L.T. 2382 on the one hand, 1983 E.L.T. 2396 on the other, amongst the decisions of the Tribunal, has not been highlighted. 10. In view of the conflicting decisions of the Tribunal adverted to and of the various High Courts, the papers may be placed before the President for constituting a larger Bench to go into the question of construction and applicability of the aforesaid Notification No. 119/75. 11. On the second question, it cannot but be held that, chemically, acetic acid and acetic anhydride are not identical. Consequently, there is undoubtedly a manufacture of anhydride from acetic acid. [Order per : H.R. Syiem, Member (J.)]- 12. With great perspicacity. Brother ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ket . So to one who would enquire whether the object has become an excisable good, these observations are sure guide, And to another who would enquire whether an object that has become excisable can avoid such excisability because of some procedure adopted in the act of bringing it into existence, they are again an unfailing path finder. The court s words leave no one in doubt that were a thing to be created and such creation is an excisable good, then it must bear duty, without regard to the manner in which or the agency by which it is created. The emergence of a new and different article having a distinctive name, character and use is all that matters. There is no denying that acetic anhydride has a distinctive name, character and use of its own different from acetic acid. Its chemical properties and, indeed, structure are different from acetic acid. That the two possess certain common components and even uses will not make one the same thing as the other, because that is true of thousands upon thousands of substances. Their names are different. The test is well and truly passed- Therefore, a new article has emerged and it must hear excise duty; and for this new article there is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the hands of the job worker, must be supplied by the customer and the only thing which the job worker has to do is to subject that article supplied by the customer to the intended manufacturing process. The final result after the manufacturing process is completed has to be returned to the customer and the job worker only charges for the job work done by him. In Associated Pigments Limited v. Collector of Central Excise, Calcutta and others [1983 E.L.T. 876 (Cal.)] the Hon ble Judges of the Calcutta High Court also interpretated Notification No. 119/75 in the same way as the Hon ble Judges of Gujarat High Court have done and observed that the conversion of pure lead or lead ignots into suboxide and lead monoxide does not amount to manufacture as envisaged by Section 2(f) of the Central Excise Act and therefore they are entitled to exemption under Notification No. 119/75-C.E., dated 30-4-1975. According to their Lordship it is settled law that when an article undergoes a manufacturing process, a new or different article emerges having a distinct name, character and use and therefore, manufacture does not mean merely to produce some change in its substance. Madras High Court ..... X X X X Extracts X X X X X X X X Extracts X X X X
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