Cal. HC: WB Government Directed to Finalise Minimum Wage of Tea Plantation Workers Within Six Weeks  ||  Delhi HC: Woman Cannot be Held Liable for Her Lover Committing Suicide Due to Love Failure  ||  All. HC: Medical Report Determining Age of Victim in POCSO Cases to be Submitted to Court Promptly  ||  Concerns About Rise in Low-Quality Law Colleges Raised by Bar Council of India  ||  Appointment of Technical Assistants as Assistant Engineers in Tamil Nadu PWD Upheld by Supreme Court  ||  Committee to Examine Issues Relating to Queer Community Constituted by Central Government  ||  Karnataka High Court: Accused can’t be Morally Convicted by Trial Court in Absence of Legal Proof  ||  Supreme Court in Plea for 100% EVM-VVPAT Verification: Human Interference to Create Problems  ||  Bom HC: Person Cannot be Deprived of Right to Sleep by Recording Statements at Unearthly Hours  ||  Supreme Court: Enable E-Filing & Virtual Appearance Facilities At UP District Courts    

Union of India v. Delhi Cloth & General Mills - (Supreme Court) (12 Oct 1962)

Raw or refined, market should know difference between goods

MANU/SC/0245/1962

Excise

After the Central government levied excise duty on readymade garments and textile bearing a brand name, and sold with a price tag of over Rs. 1000, it faced a barrage of questions over the term ‘manufacture’. Panicky retailers wondered, if by stitching on to clothing a tag to ‘brand’ the same, they would have ‘manufactured the garment and become liable to excise duty.

Decades ago the Supreme Court itself delved into what ‘manufacture’ actually meant, and how it differed from other operations, say, ‘processing’.

Appeals arose after petitions by three companies manufacturing ‘Vanaspati’ vegetable oil were allowed by the High court, successfully challenging the imposition of excise duty on the ‘manufacture’ of “refined oil” from raw oil.

Tax authorities contended before the Supreme Court that the process of turning raw oil into refined oil required numerous industrial steps. Refined oil had different physical properties as well, being largely colourless and mostly odourless, unlike raw oil which was turbid.

The court observed ‘manufacture’ to be “used a as 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.”

It distinguished manufacturing from processing, noting: “if power is used for any of the numerous process that are required to turn the raw material into a finished article known to the market…an argument that power is not used in the whole process of manufacture using the word in its ordinary sense, will not be available. It is only with this limited purpose that the legislature inserted this definition of the word 'manufacture' in the definition section and not with a view to make the mere "processing" of goods as liable to excise duty”.

The appeals were dismissed. Though there was clear distinction between refined and raw oil, that by itself was insufficient to impose excise duty. For duty to be payable, not only must a new good be brought into market, it must also be known to the market.

Relevant : Levy of excise duty on readymade garments MANU/EXCR/0020/2016

Tags : EXCISE   MANUFACTURE   REFINED OIL  

Share :        

Disclaimer | Copyright 2024 - All Rights Reserved