Vs. Popular Cotton Covering Works  INSC 435 (22 August 1994)
S.P. (J) Bharucha S.P. (J) Verma, Jagdish Saran (J) Paripoornan, K.S.(J)
1994 SCC (5) 727 JT 1994 (5) 292 1994 SCALE (3)841
Judgment of the Court was delivered by BHARUCHA, J.- This is an appeal against
the order of Customs, Excise & Gold (Control) Appellate Tribunal dismissing
the appeal filed before it by the present appellant.
assessee does job work. It is supplied electric wire whereon it winds cotton or
fibre-lass yarn and returns the wire so wound to its customers. It was called
upon to pay excise duty on the electric wire so wound under the terms of Tariff
Item 33-B. The assessee contended that the process carried out by it did not
amount to manufacture and no new product emerged. The Assistant Collector of
Central Excise held that the process brought into existence a new and a
different item, i.e., insulated wire. The insulated electric wire was itself a
complete manufactured product.
copper or aluminium wire had a separate name. Thus, the insulated wire was a
new substance distinguishable from bare electric wire. The process of covering
the bare copper or aluminium wire amounted to an incidental or ancillary
process of bringing into existence a new product having a different name,
character and use. Therefore, the process was a manufacturing process, and the assessee
was liable to pay excise duty. The Assistant Collector turned down the
alternative contention of the assessee that it was a manufacturer and,
therefore, entitled to exemption under a notification (No.83 of 1983) dated 1-3-1983.
assessee preferred an appeal before the Collector of Central Excise (Appeals), Bombay. He allowed the appeal. In his
order he observed that it was a fact that the assessee did not draw wire in its
factory. There was no dispute over the fact that the assessee brought into its
factory bare electric + From the Judgment and Order dated 18-3-1987 of the
Central Customs, Excise and Gold (Control) Appellate Tribunal, New Delhi in A.
No. E. 2487 of 1985-B1 728 wire, copper or aluminium, for he purpose of
covering it either with cotton yam or fibreglass yarn, without making any
changes in the sectional areas. On the basis of these facts, the Collector
(Appeals) found force in the assessee's submission that the covering of the
bare copper and aluminium wire received by it from its customers with cotton or
fibreglass yam did not constitute a process of manufacture, no new product
emerged and no excise duty was payable. The Assistant Collector, the appellate
order noted, had not brought any evidence on record to controvert the case of
Collector of Central Excise filed an appeal against the appellate order before
the Tribunal. The Tribunal upheld the appellate order and observed that the
Assistant Collector was wrong when he said that bare copper or aluminium wire
had a separate name, character and use; he had not established how he came to
the course of its order, the Tribunal stated that "it was an unmitigated
fallacy to say that the subject commodity after having been assessed once and
levied to duty, must pay that duty again if any process, incidental or
ancillary, is carried out on it". This was a reference to the Assistant
Collector's observation that the process of covering bare copper or aluminium
wire amounted to an incidental or ancillary process of bringing into existence
a new product. In this appeal before us the challenge is, in the main, to the
observation of the Tribunal quoted above.
no reason to go into this question in the facts of this case. The excise
authorities did not lead any evidence to establish that the winding of cotton
or fibre glass yam upon bare copper or aluminium electric wire constituted a
process of manufacture or brought into existence a new commercially recognised
article. The appellate authority's finding in this regard was justified and his
order, as also the order of the Tribunal sustaining it, must be upheld.
appeal is, accordingly, dismissed. There shall be no order as to costs.