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TMI Blog1984 (2) TMI 99X X X X Extracts X X X X X X X X Extracts X X X X ..... ds the panels to the 1st petitioner. Thereafter, the 1st petitioner, using the panels and various parts supplied by the 2nd petitioner, assembles the radios. 2. On 2nd July 1977 a notification was issued under Rule 8 of the Central Excise Rules, 1944, exempting radios falling under Item 33A(2) of the First Schedule to the Central Excises and Salt Act, 1944, of a value not exceeding Rs. 165/- per set from the whole of the excise duty leviable thereon. The proviso thereof reads thus : "Provided that the sets are manufactured in an Industrial Unit in respect of which an officer not below the rank of an Assistant Collector of Central Excise is satisfied that the sum total value of the capital investment made from time to time on plant and m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itted that the radios came into existence for the first time in its unit as a result of manufacture by it. 5. On 8th August 1980 the 1st respondent rejected the petitioner's claim for exemption. He found that the 1st petitioner had the status of a contractor, and the manufacturer within the meaning of Section 2(F) would be the 2nd petitioner. This was an irrelevant point because the exemption went with the radios manufactured provided the conditions laid down by the said notification were fulfilled. It was not material whether the 1st petitioner or the 2nd petitioner was the manufacturer. From the facts it was seen that the 1st petitioner got an important part of the radios, viz., the panels manufactured by another unit., the 3rd responde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notification. Since the manufacture of the radios was done by two units, it could not be said that the radios were completely manufactured in the premises of the 1st petitioner. 10. I shall deal with the order dated 8th August 1980 first. 'Manufacture' has been defined by the Supreme Court in Union of India v. Delhi Cloth General Mills, 1977 E.L.T. (J 199) = A.I.R. 1963 S.C. 791, to mean the bringing in to existence of a new substance. The Supreme Court observed that it did not mean merely the production of some change in a substance. The observation in an American judgment was approved, namely, that 'manufacture' implied a change, but every change was not manufacture; and yet every change of an article was the result of treatment, labo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er dated 8th August 1980. He held that it was irrelevant. He rejected the petitioner's contention for exemption on the basis that the radios were manufactured not only in their unit but also in the unit of the 3rd respondent and that, therefore, the condition of manufacture in one unit in the said notification was not satisfied. It is difficult to see how this contradictory stand could have been taken by the Excise authorities and how the deponent of the affidavit in reply failed to advert to the show cause notice dated 27th September 1980 and defended the order dated 8th August 1980. Having regard to the entirely contradictory stand taken in it, the show cause notice dated 27th September 1980 must also be struck down. 13. Rule absolute i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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