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TMI Blog2015 (10) TMI 1047X X X X Extracts X X X X X X X X Extracts X X X X ..... nt/assessee? (ii) Whether printing on duty paid GI paper would amount to manufacture? 2) The Tribunal vide impugned judgment dated March 27, 2006 has decided the first issue in favour of the Revenue classifying the goods under Chapter heading 4811.90 thereby holding that the goods fall within the description of 'printing in rolls or sheets'. The assessee has not challenged the aforesaid classification as accorded by the Tribunal and, therefore, the issue of classification has attained finality. 3) Insofar as other question is concerned, the Tribunal has decided that the process of printing of GI paper does not amount to manufacture. Aggrieved by such a conclusion on the second issue, the Revenue is in appeal before us. Therefore, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ries Ltd. 1998 (97) ELT 5 (SC). 6) Questioning the veracity of the aforesaid conclusion of the Tribunal, Mr. K. Radhakrishnan, learned senior counsel appearing for the Revenue argued that, no doubt, paper in-question was meant for wrapping/packing of the goods of the customer but that was not the determinative factor and a vital feature/aspect which was missed by the Tribunal was that after printing the said GI paper rolls, it was used for specific purpose which was not possible with the plain paper. In support, some decisions of this Court were cited. 7) Learned counsel for respondent, on the other hand, argued that the approach of the Tribunal was perfectly justified which was in consonance with the principle laid down by this Court in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of being sold in the market, the manufacture is distinct from saleability. Manufacture takes place on the application of one or more processes and each process may lead to a change in the goods but every change does not amount to manufacture. To bring the process within the definition of 'manufacture' under Section 2(f) of the Act, it is essential that there must be a transformation by which something new and different comes into being, i.e., there must now emerge an article which has a distinctive name, character or use. (ii) The judgment also explains the circumstances when transformation does not take place: Examples are given when character and use remains the same or when foreign matter is removed from an article or additio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... skins constituted a different commodity from dressed hides and skins with different physical properties), The State of Madras v. Swasthik Tobacco Factory (raw tobacco manufactured into chewing tobacco) and Ganesh Trading Co. Karnal v. State of Haryana and Anr., (paddy dehusked into rice). On the other side, cases where this Court has held that although the original commodity has under gone a degree of processing it has not lost its original identity include Tungabhadra Industries Ltd., Kurnool v. Commercial Tax Officer, Kurnool (where hydrogenated groundnut oil was regarded as groundnut oil) and Commissioner of Sales Tax, U.P., Lucknow v. Harbiles Rai and Sons (where bristles plucked from pigs, boiled, washed with soap and other chemicals ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . (2) Where the goods remain essentially the same after the particular process, again there can be no manufacture. This is for the reason that the original article continues as such despite the said process and the changes brought about by the said process. (3) Where the goods are transformed into something different and/or new after a particular process, but the said goods are not marketable. Examples within this group are the Brakes India case and cases where the transformation of goods having a shelf life which is of extremely small duration. In these cases also no manufacture of goods takes place. (4) Where the goods are transformed into goods which are different and/or new after a particular process, such goods being marketabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n which it did not bear earlier. Thus, the 'test of no commercial user without further process' would be applied as explained in paragraph 20 of Servo-Med Industries (supra). The aforesaid paragraph is extracted hereunder. "20. In Brakes India Ltd. v. Superintendent of Central Excise (1997) 10 SCC 717, the commodity in question was brake lining blanks. It was held on facts that such blanks could not be used as brake linings by themselves without the processes of drilling, trimming and chamfering. It was in this situation that the test laid down was that if by adopting a particular process a transformation takes place which makes the product have a character and use of its own which it did not bear earlier, then such process would ..... X X X X Extracts X X X X X X X X Extracts X X X X
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