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TMI Blog1992 (6) TMI 40X X X X Extracts X X X X X X X X Extracts X X X X ..... get damaged in transit for various reasons. These consignments are returned to the factory of the appellants and the broken pieces are re-melted and the sheet glasses are prepared out of the said broken pieces. The appellants do not use any other material like sand, silica, etc., which are the raw-materials for the manufacture of the final product. So, it should not be treated as 'manufacture' but should be treated as 're-make'. He, further, submitted that the rate of duty remains the same and what is returned is also sheet glasses and what is finally produced out of the said damaged sheet glasses is also sheet glasses. He cited- 1. McNicol and Another v. Pinch - King's Bench Division - 352 (1906). 2. Union of India and Others v. Delhi Cloth and General Mills Co. Ltd. and Others - 1977 (1) E.L.T.(J 199). 3. Union of India v. S.B. SugarMills - 1978 (2) E.L.T.(J 666). 4. Union of India v. The Britannia Biscuit Co. Ltd. - 1980 (6) E.L.T. (J 649) (U.O.I). 5. Century Spinning and Manufacturing Co. Ltd. v. Union of India - 1981 (8) E.L.T. 676 (Bom.). 6. Collector of Customs, Meerut v. J.G. Glass Ltd. - 1988 (37) E.L.T. 248 (Tri.). 4. Shri Chakravorty, Ld. J.D.R. made fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made or re-conditioned would never arise. These words themselves suggest that the goods might have been broken, dented, bent or some such damage may have been caused and the goods will be required to be re-made, refined, re-conditioned, etc. So, in our view, the correct interpretation of the Rule should be that same consignment, i.e. the goods which were cleared should return back to the factory and not necessarily in the same condition. In the present appeals, it is not in dispute that the consignments which were cleared, were returned, but the sheet glasses which were consigned were broken in transit and were returned to the factory. The refund claims, which are the subject-matter of these appeals have been rejected by the Assistant Collector on following ground :- "Under Central Excise Rules, the returned goods are permitted into the factory for re-making, reconditioning, etc. and not for re-manufacture. The broken pieces of glass sheets can be used, only for re-manufacture. There is no such provision in Central Excise Rules to permit return of damaged duty-paid goods to the factory for the purpose of re-manufacture." 7. The appeals preferred in all these cases were rejected ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g or repairing any explosive - Indian Explosives Act, 1884. Section 4(2). 'Manufacture' - in relation to any insecticide includes :- (a) Any process or part of a process for making, altering ...... any insecticide with a view to its sale, distribution or use - Insecticides Act, 1968. Section 3(j). 'Manufacture' - includes any art, process or manner of producing, preparing or making an article and also any article prepared or produced by manufacture - Indian Patents Designs Act, 1911. Section 2(10). 'Manufacturing Process - means any process for or incidental to making, finishing .... any article or substance with a view to its use, sale, transport,..... as beedi or cigar or both". Beedi and Cigar Workers (Conditions of Employment) Act, 1966. Section 2(k). 'Manufacturing Process' - means any process for :- (a) making, altering, repairing... any article or substance with a view to its use, sale, transport....." Factories Act, 1948. Section 2(k). 'Manufacture' has been defined as a manner of adapting natural materials by the hands of man or by man-made devices or machinery and as the making of an article or material by physical labour or applied power, but the practic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g glass from the glass and it was not 'manufacture', but, as discussed above, the submission was not proper. In fact, the appellants had been using broken pieces as raw material and for the process of manufacture, it is not necessary that only raw material which was used originally, should be used, because the process remains the same and the final product is also the same. But even if it be so, it does not preclude the appellants from seeking refund of duty under provision of Rule 173L. 14. In Sriram Pistons and Rings Ltd., Ghaziabad v. Collector of Central Excise, Meerut -1983 (14) E.L.T. 1927 (CEGAT) similar issue had come for decision. In that case, the question was of interpretation of Rule 173H as it stood at the relevant time and in para 16(a), the Bench was pleased to observe as under: "On a perusal and harmonious construction of the clauses of Rule 173H, it would appear that to avail of the benefit of the said rule the process of "remaking" should be such that it falls short of re-manufacture. A contention to the contrary ignores Clause (2) of the said Rule altogether." 15. So, in that case, the Bench was of the opinion that "remaking" is not manufacture. It may be n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in our view, decision in Sriram Pistons case (supra), does not clinch this issue. 17. In light of above discussion, we allow all these appeals and set aside the impugned orders with consequential relief to the appellants. 18. [Contra per : I.J. Rao, Member (T)]. - I regret my inability to agree with my learned brother on the point whether the process involved in bringing into existence new sheet glass from damaged sheet glass amounts to manufacture or is merely remaking. Rule 173L deliberately omits, from its ambit, remanufacture. It mentions the purposes of being remade, refined, reconditioned or any other similar process. The omission of the word remanufacture in this Rule is, in my opinion, deliberate. 19. Central Excise Law not having made any distinction between remanufacture and remaking, guidance has to be taken from the definition of manufacture and a comparison of the same with the language of Rule 173L. Such a comparison shows that manufacture is something more than remaking. This is indicated also by the ordinary meaning of the two terms. If glass sheets are brought into existence in a process starting from the stage of broken glass which is the raw material, and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urring in 173L amounts re-manufacture. He also relied upon the case of Collector of Central Excise, Meerut v. J.G. Glass Ltd., reported in 1988 (37) E.L.T. 248 (Tribunal), where the Tribunal held that re-making of glass out of rejected duty paid broken glass vials is manufacture and that in such a case also 173H (2) will apply. The learned Counsel further pointed out that the reliance placed by the Member (Technical) in the case of Sriram Pistons and Rings Ltd., Ghaziabad v. Collector of Central Excise, Meerut, reported in 1983 (14) E.L.T. 1927 (CEGAT) did not deal with Rule 173L but was relating to Rule 173H. Shri L.C. Chakravorti, the learned Senior Departmental Reprsentative appearing for the Department contended that the word re-making has the shades of meaning as brought out at page-5 of Order of the Member (Judicial), para-10. He submitted that re-making will mean and cover the entire process from the original raw material stage. In the present case the process will be from the broken glass and not the earlier stage of raw material like sand silica etc. Therefore, the process is not re-making as it does not involve making a thing over again from an original raw material. Ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the time of amendment of Rule 173H on 26-6-1976 by letter dated 2-7-1976, wherein it was clarified "It may, however, be noted that remaking, refining, reconditioning or subjecting the goods to any other similar process will not amount to manufacture if the goods are subsequently cleared after rectification of defect is in the same form in which they were retained or brought in the factory". In that decision the Tribunal further cite the Bombay High Court judgment reported in 1981 (8) E.L.T. 676 (Bom.) in the case of Century Spinning and Manufacturing Company Limited v. Union of India for the purposes of what will be the same form. The Bombay High Court was dealing with the re-import of spinnerettes after re-making abroad. The Department denied duty concession because unserviceable and worn out spinnerettes have been exported which were remelted, refined and remade into spinnerettes and that these were new goods or remanufactured spinnerettes and, therefore, identity could not be established with those exported for repairs. The High Court held that if the remade spinnerettes were of identical weight and exact description as of worn out spinnerettes, there was no loss of identity be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... term 'remake' which will cover a process of transformation which could amount to remanufacture the processes undertaken by the appellants herein of re-manufacture of the glass-sheet out of duty paid defective/broken glass has to be taken to be covered by the scope of Rule 173L. As the Tribunal noted in the J.G. Glass Ltd.'s case (supra), there is no other way of remaking in respect of such goods. It also can be concluded from the ratio of the case law cited supra that sheet glass received and that cleared would be of the same class to goods for the purposes of Rule 173L. It is, therefore, concluded that the meaning of the word 'remade' used in the Rule 173L is of wider import and would cover a process of transformation and implies remaking in the sense of making once again or manufacturing once more, that is, remanufacture. It is also noted that it is the understanding of the Departmental authorities also based on the Law Ministry's advice that the process of remaking under Rule 173L would amount to remanufacture. The difference of opinion is disposed of accordingly. FINAL ORDER In view of the majority opinion, all the four appeals are allowed with consequential relief, if an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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