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TMI Blog1994 (9) TMI 66X X X X Extracts X X X X X X X X Extracts X X X X ..... . The work done by him cannot be characterised as a job-work. If all the requisite rings, adopters and sleeves had also been supplied by Modipon, it could probably have been said that the appellant's work is in the nature of job-work. But that is not the case here. The Tribunal was, therefore, right in holding that the appellant cannot avail of the benefit of the Notification. The appeal accordingly fails and is dismissed. Civil Appeal Nos. 1384-85 of 1987 - It does not appear that the respondent adds any of his own material while manufacturing the transmitters and components as job work, the High Court was right in extending the benefit of the Notification to the respondent. Civil Appeal No. 3464 of 1988 - Tribunal has not clearly dealt with the process of manufacture undertaken by the appellant. It appears that the customer entrusts lead ingots to the appellant who manufactures lead suboxide and litharge from them. Whether the appellant adds any of his own material or whether the said manufactured products are made wholly or substantially from the material supplied by the customer is not clear from the judgment of the Tribunal. Thus remit the matter to the Tribunal for dec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ured in a factory as a job work from so much of the duty of excise leviable thereon as is in excess of the duty calculated on the basis of the amount charged for the job work. Explanation. - For the purposes of this notification, the expression `job work' shall mean such items of work where an article intended to undergo manufacturing process is supplied to the job worker and that article is returned by the job worker to the supplier, after the article has undergone the intended manufacturing process, on charging only for the job work done by him." 2.Since there is no dispute as to the facts found by the Tribunal, we shall state the relevant facts from the order under appeal. As a matter of fact, a number of questions were raised before the Tribunal, of which we are concerned only with one, viz., the one pertaining to the Notification 119/75. We shall, therefore, state the facts insofar as they are relevant to the said question. 3.The appellant had entered into an agreement with M/s. Modipon Limited, Modi Nagar whereunder Modipon was to supply steel pipes from which the appellant was to manufacture cops (falling under Tariff Item No. 68 of the Central Excise Tariff Schedule i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any process - incidental or ancillary to the completion of manufactured(i) product; which is specified in relation to any goods in the Section(ii) or Chapter notes of the Schedule to the Central Excise Tariff Act, 1985 as amounting to manufacture, and the word "manufacturer" shall be construed accordingly and shall include not only a person who employs hired labour in the production or manufacture of excisable goods, but also any person who engages in their production or manufacture on his own account. "factory" means any premises, including the precincts(e) thereof, wherein or in any part of which, excisable goods other than salt are manufactured or wherein or in any part of which any manufacturing process connected with the production of these goods is being carried on or is ordinarily carried on." 6.So far as the expression "job work" is concerned, it is not defined in the Act but in the Notification itself. The Explanation appended to the Notification defines it for the purposes of the said Notification. It says that job work shall mean "such items of work where an article intended to undergo manufacturing process is supplied to the job worker and that article is re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o be read along with and harmonised with the Explanation. The definition of `manufacture' shows that "any process incidental or ancillary to the completion of a manufactured product" is also manufacture. The manufacturing contemplated by the Notification is this kind of manufacture alone and not manufacturing in its ordinary sense. This is the only way of reconciling the word "manufactured" with the Explanation contained in the Notification. Only where the manufactured product is subjected to an incidental or an ancillary process with a view to make it a marketable product is the Notification attracted but not where a totally new article is manufactured. If the extended meaning, contended for by the appellant, is placed upon the said Notification, it would tend to defeat and nullify the main charging section contained in Section 3 which levies duty upon all excisable goods produced or manufactured in India. The Notification did not and could not have intended to exempt the manufactured goods from the excise duty but only those processes undertaken as job works, which but for the said Notification would have obliged the appellant to pay duty upon the entire value of the manufactured ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Revenue's contention was that by virtue of the manufacturing process undertaken by the petitioner pure lead got converted into and emerged as totally new articles/goods called lead suboxide and lead monoxide. In such a situation, the Revenue submitted, the Notification is not attracted. The learned Judge quoted with approval the earlier decisions of the Calcutta High Court aforesaid as well as the decision of the Gujarat High Court in Anup Engineering Co. v. Union of India [1978 (2) E.L.T. 533] and upheld the petitioner's claim. The learned Judge also referred to the meaning of the word "manufacture" as stated by this court in Union of India v. Delhi Cloth and General Mills Co. Ltd. [1977 (1) E.L.T. (J 199) (SC) = A.I.R. 1963 S.C. 791] and held that merely because a new commodity emerges as a result of manufacturing process undertaken as a job work, the benefit of the Notification cannot be denied. 11.In Anup Engineering Ltd. v. Union of India (which is the subject matter of Civil Appeal Nos. 19-22 of 1980 before us), a Division Bench of the Gujarat High Court dealt with a case where the customers supplied to the petitioner-company materials such as tin plates, sheets, tubes, pip ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ory is a job work. In support of this view, the Division Bench relied upon the Trade Notice issued by the Deputy Collector, Central Excise, Bombay on April 30, 1975 wherein it was stated that it was not necessary for attracting the Notification that the article received by the job worker and the processed article returned by him should have the same trade description. The Division Bench further observed that accepting the Revenue's contention would render the Notification totally otiose and redundant. If a new article does not emerge after the manufacturing process is completed, the Bench observed, there would be no occasion to levy excise duty at all. 12.A learned Single Judge of the Madras High Court, Padmanabhan, J. also held in Bapalal Co. v. Government of India [1981 (8) E.L.T. 587] that where the petitioner merely applies its labour and converts the rough diamonds into diamond jewellery for which act of conversion, it received labour charges, it amounts to a job work as contemplated by the Notification. 13.A Division Bench of the Karnataka High Court has also taken the same view in Precision Telecom Products v. Superintendent of Central Excise Ors. [1986 (24) E.L.T. 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers of CEGAT was constituted to consider the issue. The decision of the Special Bench is reported in National Organic Chemical Industries Ltd. v. Collector of Central Excise, Bombay [1985 (21) E.L.T. 252]. The facts considered by the Special Bench are : the appellants were manufacturing ethylene. They bought chlorine for that purpose. M/s. Calico Chemicals, who may be called a customer, also used to make available chlorine to the appellants. The appellants reacted chlorine with ethylene for conversion into vinyle chloride. A part of vinyle chloride so manufactured by the appellants was delivered to Calico Chemicals, calculated with reference to an agreed formula. The balance vinyle chloride was utilised by the appellants for further conversion into polyvinyle chloride. The question was whether the vinyle chloride that was delivered to Calico Chemicals by the appellants attracted excise duty on the value of the said vinyle chloride or whether the appellants were liable to pay duty only on the amount charged by them as conversion charges. From the facts aforestated, it is clear that only a part of the material required for manufacturing vinyle chloride was supplied by Calico Chemical ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out by this Court in Delhi Cloth and General Mills Ltd. Indeed, they have not even referred to the definition in Section 2(f) of the Act. Once an expression is defined in the Act, that expression wherever it occurs in the Act, Rules or Notifications issued thereunder, should be understood in the same sense. Indubitably, the definition of "manufacture" in Section 2(f) endows a wider content to the expression; several processes which would not ordinarily be understood as amounting to manufacturing are specifically included within its ambit. Clauses (i) and (ii) of the definition make this aspect clear beyond any doubt. In this connection, it must be remembered that even the unamended definition of "manufacture" included within the ambit of the definition several processes and activities which would not otherwise have amounted to manufacture. The unamended definition contained as many as eight sub-clauses. Sub-clause (iv), for example, stated that in relation to goods comprised in Item No. 18-A of the First Schedule, the expression "manufacture" includes sizing, beaming, warping, wrapping, winding and reeling or any one or more of these processes or the conversion of any form of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of its work does not cease to be job-work. Indeed, this aspect has been stressed in all the decisions of High Courts referred to hereinbefore. 18.The interpretation placed by us does not render the Explanation in the Notification redundant in any manner, while at the same time it advances the object of the Notification, viz., helping factories undertaking manufacturing processes in the nature of job-work. The restricted interpretation contended for by the Revenue unduly curtails the operating field of the Notification. True it is that processes incidental or ancillary to the completion of the manufactured product are within the purview of the Notification, but it may not be correct to say that the Notification refers only to those processes and to nothing else. In the two illustrations given in Anup Engineering, viz., where the brass sheet is moulded into a brass pot and where the cloth piece is stitched into a suit, or in the illustration given by us, viz., where shoe uppers and soles etc. are supplied by the customer and the factory prepares shoes out of them, it cannot be said that the article that is entrusted to the factory (undertaking job-work) and the article that is supp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant himself and he manufactures the cops out of them. The work done by him cannot be characterised as a job-work. If all the requisite rings, adopters and sleeves had also been supplied by Modipon, it could probably have been said that the appellant's work is in the nature of job-work. But that is not the case here. The Tribunal was, therefore, right in holding that the appellant cannot avail of the benefit of the Notification. The appeal accordingly fails and is dismissed. No costs. Civil Appeal Nos. 1384-85 of 1987 20.These appeals are preferred against the judgment of the Karnataka High Court in Precision Telecom Product v. Union of India Ors. [1986 (24) E.L.T. 235] with which decision we have already dealt with. Since it does not appear that the respondent adds any of his own material while manufacturing the transmitters and components as job work, the High Court was right in extending the benefit of the Notification to the respondent. It appears from the record that all the material required for manufacturing the transmitters and components, namely, aluminium alloy, nickel, silver, graphite rods, carbon granules are supplied by the Indian Telephone Industr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e notification cannot be forced to operate in conditions it is not qualified to operate. In the case before us now, we have the added factor that acetic anhydride by Sirsilk is not known to be the product of the acetic acid brought by the particular customer, because Sirsilk uses this process for its own production programmes as well. The acetic acid first gets mixed with other acetic acid or the finished anhydride gets mixed with anhydrides obtained from other acetic acid. There is no segregation and therefore no one can tell that the acetic anhydride was the result of this or that acetic acid." Though the Tribunal purported to follow the principle of Anup Engineering, it yet denied the benefit of the Notification to the appellant in the above facts and circumstances. We see no flaw in the reasoning of the Tribunal. The appeal accordingly fails and is dismissed. No costs. Civil Appeal No. 3963 of 1990 24.This appeal is preferred against the judgment and order of a learned Single Judge allowing the writ petition following Anup Engineering. The judgment of the High Court does not set out the relevant facts nor the manufacturing process undertaken by the respondent-writ petitione ..... X X X X Extracts X X X X X X X X Extracts X X X X
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