Page 254 - ELT_1_1st April 2020_Vol 372_Part

140 EXCISE LAW TIMES [ Vol. 372

4.2 The ratio of the Hon’ble Supreme Court’s judgment in case of J.G.
Glass v. UOI (supra) in which it was held that printing of glass bottles does
not amount to manufacture is squarely applicable to the facts of this case.
4.3 Hon’ble Supreme Court in a series of judgment - South Bihar Sugar Mill
v. UOI reported in 1978 (2) E.L.T. J336 (S.C.) and Union of India v. Delhi Cloth
Mills Ltd. reported in 1977 (1) E.L.T. J199 (S.C.) and Tega India Ltd. v. CCE
reported in 2004 (164) E.L.T. 390 (S.C.) has held that manufacture implies a
process, as a result of which a new product with distinctive name, character
and usages emerges, that the word ‘manufacture’ implies change, but every
change in raw material is not manufacture and that there must be such a
transformation in the raw material as a result of the processing that a new
and different article with distinct name, characteristics and usages emerges.
This criteria of manufacture is not satisfied in this case as, as mentioned
above, the MS and the HSD after blending with MFA remain MS and HSD
only and except for a brand name being added to their names, there is no
change in their basic characteristics and usages. As mentioned above, there
is no separate ISI specification for branded MS or branded HSD and both
branded as well as unbranded MS/HSD have to conform to the same ISI
specifications. Similarly, there is no change in their use. Thus, applying the
above-mentioned criteria laid down by the Hon’ble Supreme Court as to
what constitutes manufacture, the process of blending ordinary MS or HSD
with MFA to make branded MS or branded HSD, does not amount to man-
ufacture.
4.4 The Tribunal judgment in case of Collector of Customs, Madras v. Air
Control System, Madras, wherein Tribunal has held that blending of Sodium
Hexa Metaphosphate with Polytetra fluorethylene (PTFE) amounts to man-
ufacture is not applicable to the facts of this case. The issue involved in the
case of M/s. Air Control System was as to whether PTFE, which is an anti-
friction oil, is a raw material, importable under open general import licence.
The contention of Customs Authorities in that case was that it is a finished
product. It is in this context that the Tribunal observing that since PTFE is
sold only after blending with small quantity of Sodium Hexa Metaphos-
phate which is dispersal agent and without which it is not usable, held that
the blending of PTFE with Sodium Hexa Metaphosphate amounts to manu-
facture and, therefore, PTFE is a raw material, importable and OGL. The is-
sue involved in the present case is totally different. In the present case, it is
not the case of the Respondents that MS/HSD without blending with MFA
are not usable. Blending of MS/HSD with MFA to make branded MS/HSD
which sell at a premium only improves the quality of the product, and this
process, as discussed above, would not amount to manufacture.
5. In view of the above, the impugned orders are not sustainable and the
same are set aside. The appeals are allowed.”
7. The same view has been taken by the Tribunal in the following cases
also :
(i) Hindustan Petroleum Corporation Limited v. Commissioner of C. Ex.,
Lucknow - 2015 (319) E.L.T. 133
(ii) Bharat Petroleum Corporation Limited v. Commissioner of C. Ex. & S.T.
Patna - 2013 (295) E.L.T. 106 (T-Kol.)
(iii) Bharat Petroleum Corporation Limited v. Commissioner of C. Ex. - 2018
(361) E.L.T. 950 (T).

EXCISE LAW TIMES  1st April 2020  302