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TMI Blog1995 (3) TMI 95X X X X Extracts X X X X X X X X Extracts X X X X ..... cates with him), for the appellant. [Judgment per : B.P. Jeevan Reddy, J.]. - In this appeal preferred by the Collector, Central Excise, Bombay under Section 35(L) of the Central Excise Act, 1944 (hereinafter referred to as `the Act'), the question is whether the distillation and recrystallisation carried out by the respondent amounts to `manufacture'? The respondent, M/s. S.D. Fine Chemical Pvt. Ltd., are engaged in the manufacturing of laboratory chemicals and fine chemicals. They also undertake repacking and purification of laboratory and fine chemicals. In the classification list filed by them on April 1, 1983, they claimed that the process of purification and distillation undertaken by them does not amount to process of manufacture and accordingly, claimed exemption from duty in respect of such goods under Notification No. 77 of 1963 dated March 1, 1963. The Assistant Collector agreed with the respondent but his order was revised by the Collector (Appeals) who held that the processes undertaken by the respondent do amount to manufacture. Inasmuch as a new commodity known to the market emerges as a result of such processes, he held, they are liable to excise duty. The resp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fferent chemical name and have an altogether different use. The third Member did not also deal with the holding of the Member (Judicial) that after the processes undertaken by the respondent, the chemical became a different commercial commodity. 3.The expression `manufacture' is defined in clause (f) of Section 2 of the Act. The definition, as substituted by Finance Act (No. 25) of 1975, with effect from March 1, 1975 reads thus : " `manufacture' includes any process, - incidental or ancillary to the completion of a 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 `manufacture' 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." 4.The definition is thus an inclusive definition. The purpose of the definition is to include certain processes and activities within the ambit of the said definition which may not otherwise amount to manufacture, as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e market an excise duty may be leviable under Item 23 (the present item 12)". 5.The Court then dealt with the next argument of the appellant Union of India that even if it is held that the respondent did not manufacture `refined oil' as known to the market, even so they must be held to manufacture some kind of `non-essential vegetable oil' within the meaning of Item 23. This Court rejected the said argument with reference to the meaning of the expressions "manufacture" and "goods", in the following words : "The word "manufacture' used as a verb is generally understood to mean as `bringing into existence a new substance' and does not mean merely `to produce some change in a substance,' however minor in consequence the change may be. This distinction is well brought about in a passage thus quoted in Permanent Edition of Words and Phrases, Vol. 26 from an American Judgment. The passage runs thus :- `Manufacture' implies a change, but every change is not manufacture and yet every change of an article is the result of treatment, labour and manipulation. But something more is necessary and there must be transformation; a new and different article must emerge having a distinctive na ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... med. 8.In Empire Industries Ltd. Ors. v. Union of India Ors. [1985 (20) E.L.T. 179 = 1985 (3) S.C.C. 314 ] the question arose whether the process of bleaching, dyeing, printing of grey cloth amounts to `manufacture' as defined in the Act. It may not be necessary to set out the reasoning in this case inasmuch as the very same question was considered later by a Constitution Bench of this Court in M/s. Ujagar Prints Ors. v. Union of India Ors. [1988 (38) E.L.T. 535 = 1989 (3) S.C.C. 488 ]. We will, therefore, refer to the reasoning in Ujagar Prints. The facts in Ujagar Prints were these : the customers supplied the grey fabric to the appellant who carried out operations of bleaching, dyeing, printing, glazing, shrink-proofing etc. against payment of processing charges. The ownership of the cloth rested with the customers who got these processes done to their specifications from the appellant on payment of processing charges. The question was whether the appellant can be said to have undertaken `manufacture' as defined in the Act. M.N. Venkatachaliah, J., as the then learned Judge was, dealt with several decisions of this Court including those referred to above as well as the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9], this Court observed, after referring to the principle of Delhi Cloth and General Mills (supra) and South Bihar Sugar Mills (supra), to the following effect : "This principle is well-settled. This is a question of fact depending upon the relevant material whether as a result of activity, new and different article emerges having a distinct name, character and use." 11.On the meaning of expression "process", the following statement in the decision of this Court in Collector of Central Excise, Jaipur v. Rajasthan State Chemical Works, Deedwana, Rajasthan [1991 (55) E.L.T. 444 = 1991 (4) S.C.C. 473] is relevant : "The natural meaning of the word `process' is a mode of treatment of certain materials in order to produce a good result, a species of activity performed on the subject-matter in order to transform or reduce it to a certain stage. According to Oxford Dictionary one of the meanings of the word `process' is "a continuous and regular action or succession of actions taking place or carried on in a definite manner and leading to the accomplishment of some result." The activity contemplated by the definition is perfectly general requiring only the continuous or quick succes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... definition must be understood in terms it is couched. It should also be remembered that the question whether a particular process does or does not amount to `manufacture' as defined under Section 2(f) is always a question of fact to be determined in the facts of a given case applying the principles enunciated by this Court. One of the main tests evolved by this Court is whether on account of the processes employed or applied by the assessee, the commodity so obtained is no longer regarded as the original commodity but is, instead, recognised as a distinct and new article that has emerged as a result of the processes (Ujagar Prints). 14.Now coming to the facts of the case before us, it is clear from the perusal of the opinion of the third Member of the Tribunal that he has not dealt with the case in a full and proper manner and has disposed of the issue in a cryptic manner. It has, therefore, become necessary to remit the matter for the fresh opinion of the third Member of the Tribunal. The third Member shall now hear the parties and render his opinion afresh on the question referred to him. He shall do so within six months from this date. He shall transmit his opinion to this Co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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