# NARNE TULAMAN MANUFACTURES PVT. LTD. 1,A HYDERABAD v. COLLECTOR OF CENTRAL EXCISE, HYDERABAD

- **Citation:** [1988] Supp. 3 S.C.R. 1
- **Court:** Supreme Court of India
- **Decided:** 1988-09-15
- **Case number:** Civil Appeal Nos. C 1335-36 of 1987
- **Bench:** Sabyasachi Mukharji, M.H. Kania, S. Ranganathan
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/narne-tulaman-manufactures-pvt-ltd-1-a-hyderabad-v-collector-of-central-excise-10035
- **Pages:** 4

## Headnote

..
Central Excises and Salt Act, 1944: Section 2(f)-'Manufacture'
means bringing into existence new goods-When parts and end pro.duct
separately dutiable-Both taxable.
c
The appellant manufactured one of the three parts, i.e., Indicating system, required for the manufacture of weighbridges, and after
procuring the other two parts brought the three components together
at site, fitted and assembled them together and thus created a new
weighbridge. The appellant challenged the excise duty levied on the
D
manufacture of weighbridges under the Central Excises and Salt Act,
.J
1944 .
The appellant's contention before the Customs, Excise and Gold
(Control) Appellate Tribunal .was that it was preparing only.a part of
the weighbridge which was dutiable as a separate part, and that as a
E
part of machine was liable to duty then the whole end product should
not be dutiable as separate excise goods. The Tribunal held that by
whatever process it became a complete weighbridge, as long as a
weighbridge had been made and completed, duty had to be paid.
According to the Tribunal, though the parts were themselves liable to
~
excise duty, the complete machine was also a new excisable Commodity.
F
Dismissing the appeal, it was,
HELD: (1) Section 2(1) of the Act provides an inclusive definition
and states that the word "manufacture" includes any process incidental or ancillary to the completion of a manufactured product. So any
G
p~
by whkh an object becomes new commercial Commodity, including
a11y process incidental or ancillary to the completion, would. be
manufacture. [3C]
J
(2) Manufacture means bringing into existence new goods. There
must be transformation and a new and differ~nt article must emerge H
l
2
SUPREME COURT REPORTS
[1Q88] Supp. 3 S.C.R.
A
having a distinctive name, character or use. [3D-E]
Union of India v. Delhi Cloth Mills, [1%3] Suppl. 1 S.C.R. 5116;
Allenburry Engineers (p) Ltd. v. Ramakrishna Dalmia, [1973] 2 S.C.R.
257 and Idandas v. Anant Ramchandra Phadke, [1981] 3 Scale 1790,
referred to.
(3) If the end product is a separate product which comes into
being as a result of the endeavour and activity of the appellant, then the
appellant must be held to have manufactured the said item. When parts
and the end product are separately dutiable-both are taxable. [4A-BI

## Text

NARNE TULAMAN MANUFACTURES PVT. LTD.
1,A
HYDERABAD
v.
COLLECTOR OF CENTRAL EXCISE, HYDERABAD
SEPTEMBER 15, 1988
B
[SABYASACHI MUKHARJI, M.H. KANIA
AND S. RANGANATHAN, JJ.]
..
Central Excises and Salt Act, 1944: Section 2(f)-'Manufacture'
means bringing into existence new goods-When parts and end pro.duct
separately dutiable-Both taxable.
c
The appellant manufactured one of the three parts, i.e., Indicating system, required for the manufacture of weighbridges, and after
procuring the other two parts brought the three components together
at site, fitted and assembled them together and thus created a new
weighbridge. The appellant challenged the excise duty levied on the
D
manufacture of weighbridges under the Central Excises and Salt Act,
.J
1944 .
The appellant's contention before the Customs, Excise and Gold
(Control) Appellate Tribunal .was that it was preparing only.a part of
the weighbridge which was dutiable as a separate part, and that as a
E
part of machine was liable to duty then the whole end product should
not be dutiable as separate excise goods. The Tribunal held that by
whatever process it became a complete weighbridge, as long as a
weighbridge had been made and completed, duty had to be paid.
According to the Tribunal, though the parts were themselves liable to
~
excise duty, the complete machine was also a new excisable Commodity.
F
Dismissing the appeal, it was,
HELD: (1) Section 2(1) of the Act provides an inclusive definition
and states that the word "manufacture" includes any process incidental or ancillary to the completion of a manufactured product. So any
G
p~
by whkh an object becomes new commercial Commodity, including
a11y process incidental or ancillary to the completion, would. be
manufacture. [3C]
J
(2) Manufacture means bringing into existence new goods. There
must be transformation and a new and differ~nt article must emerge H
l
2
SUPREME COURT REPORTS
[1Q88] Supp. 3 S.C.R.
A
having a distinctive name, character or use. [3D-E]
Union of India v. Delhi Cloth Mills, [1%3] Suppl. 1 S.C.R. 5116;
Allenburry Engineers (p) Ltd. v. Ramakrishna Dalmia, [1973] 2 S.C.R.
257 and Idandas v. Anant Ramchandra Phadke, [1981] 3 Scale 1790,
referred to.
(3) If the end product is a separate product which comes into
being as a result of the endeavour and activity of the appellant, then the
appellant must be held to have manufactured the said item. When parts
and the end product are separately dutiable-both are taxable. [4A-BI
CIVIL APPELLATE JURISDICTION: Civil Appeal Nos.
C 1335-36 of 1987.
'
D
From the Judgment and Order dated 3.10.1986 of the Customs
Excise .and' Gold (Control) Appellate Tribunal New Delhi in Appeal
No. E 1568 & 1569/81-Bl in Order No. 673/86-BI.
A.S. Nambiar and B. Parthasarthi for the Appellant.
Kuldip Singh, Additional Solicitor General, A.K. Srivastava
and Mrs. Sushma Suri for the Respondents.
E
The Judgment of the Court was delivered by
SAJIYASACHI MUKliARJI, J. These are appeals under section
35L of the Central Excises and Salt Act, 1944 (hereinafter called 'the
Act') arise from the decision of the Customs, Excise and Gold
(Control) Appellate Tribunal {CEGAT for short), New D~lhi. The
F question that fell for consideration by the Tribunal is whether the
appellant M/s. Name Tulaman Manufacturers Pvt. Ltd. manufactured
weighbridge~ and as such was liable to duty under the Act.
It appears that weighbridges consisted of three different parts,
namely, (1) Platform, (2) Load Cells and (3) Indicating system. The
b contention of the appellant was that he got the platform manufactured
from other people. The load cells were imported and the appellant
only made the indicator system. In other words, it was the case of the
appellant that it manufactured only the indicator system. The question, that fell 'for the Tribunal's determination is whether the activity
indisputably c.arried out by the appellant amounted to manufacture
ff and what does it manufacture? It has been found that "the appellant
..
-·
N.T. MFRS. v . .COLLECTOROFCENTRALEXCISE [MUKHARJl,J.)
3
brought the three components together at site, fitted and assembled
them together so that they can work as one machine and as such the
appellant manufactured and created a new weigbbridge". The aforesaid findings appear in paragraph 5 of the Tribunal's order. That
weighbridge had not been excised before is not disputed. The term of
the central excise speaks of "weighbridge"; wheneve1 weighbridges
are made, those weighbridges are subjected to duty as such. The
Tribunal held that by whatever process it became a complete weighbridge as long as a weighbridge has been made and completed, duty
has to be paid. According to the Tribunal, though the parts are
themselves liable to excise duty and so the complete machine is also
a new excisable good. In view of the well-settled principles, the
excisable goods are manfactured by the appellant. Section 2(f) of the
Act provides an inclusive definition and states that the word
"manufacture" includes any process incidental or ancillary to the completion of a manufactured product. So any process by which an object
becomes new commercial goods, including any process incidental or
ancillary to the completion would be manufacture. Manufacture
means bringing into existence new goods. This Court observed in
Union of India v. Delhi Cloth Mills, [1963] Suppl. 1 S.C.R. 586 that
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 name, character or use. The question, therefore, is whether the
activity carried out by the appellant of assembling the three components of the weighbridge brings into being complete weighbridge
which was a distinctive name, characte.r or use. See also the observations of this Court in Allenburry Engineers (p) Ltd. v. Ramakrishna
Dalmia & Ors., [1973] 2 S.C.R. 257 and Jdandas v. Ananat
Ramchandra Phadke, [1981] 3 Scale 1790.
The appellant's contention before the Tribunal was that it was
only preparing a part and that part is dutiable as a separate part. The
appellant, however, did the work of assembling. As a result of the
work of the appellant a new product known in the market and known
under the excise item "weighbridge" comes into being. The appellant
will become a manufacturer of that product and as such liable to duty.
That is precisely what the Tribunal found on the facts of the case. The
appellant seems to have been obsessed by the idea that as a part of
machine is liable to duty t.hen the whole end product should not be
dutiable as separate excise goods. That is mistake, a part may be goods
as known in the excise laws and may be dutiable. The appellant in this
A
B
c
D
E
F
G
4
SUPREME COURT REPORTS
[1988] Supp. 3 S.C.R.
A case claims to have manufactured only the indicator system. If the
indicator system is a separate part and a duty had been paid on it and if
the rules so provide then the appellant may be entitled to abatement
under the rules. But if the end product is a separate product which
comes into being as a result of the endeavour and activity of the
B
appellant then the appellant must be held to have manufactured the
said item. When parts and the end product are separate_ly dutiableboth are taxable.
In that view of the matter, the appellant's case that it is liable
only for the component part and not the end product cannot be
entertained. The Tribunal was, therefore, right in the view it took.
C
These appeals have no merit and are accordingly dismissed. This order
will not preiudice the rights of the appellant to claim, if any, abatement as indicated before according to the rules if the appellant is so
entitled.
R.S.S.
Appeals dismissed.
...
/ '