Page 298 - ELT_1_1st April 2020_Vol 372_Part

184 EXCISE LAW TIMES [ Vol. 372
“We have heard the Learned Counsel for the appellant. The short
question is whether brake lining blanks purchased by the appellant when
put to the process of drilling, trimming and chamfering can be said to
amount to manufacturing within the meaning of Section 2(f) of the Central
Excises and Salt Act, 1944. The High Court has examined this question in
considerable detail and has then observed in paragraph 15 as under :
“If by a process, a change is effected in a product, which was
not there previously, and which change facilitates the utility of the
product for which it is meant, then the process is not a simple process,
but a process incidental or ancillary to the completion of a manufac-
tured product. It will not always be safe solely to go by a test as to
whether the commodity after the change takes in a new name, though
in stated circumstances, it may be useful to resort to it. This may prove
deceptive sometimes for it will suit the manufacturer to retain and
stamp the same name to the end product also. The ‘character or use’
test has been given due importance by pronouncements of the Su-
preme Court. When adopting a particular process, if a transformation
takes place, which makes the product have a character and use of its
own, which it did not bear earlier, then the process would amount to
manufacture within the meaning of Section 2(f) irrespective of the fact
whether there has been a single process or have been several process-
es.”
2. The Learned Single Judge from whose judgment the Division Bench
was considering the appeal had pointed out that brake lining blanks could
not be used by owners of motor vehicles without holes and trimming and
chamfering. The learned Single Judge also pointed out that it was only after
this process which the blank brake linings underwent that they could be
used by automobile manufacturers in the manufacture of their vehicles. We
are of the opinion that both the Learned Single Judge as well as the Division
Bench applied the correct test and we see no reason to interfere therewith.
The appeals are, therefore, dismissed with no order as to costs.”
17. Further, we find that a similar issue has come up in the case of
Mamta Surgical Cotton Industries (supra) wherein the assessee was carrying on the
business of processing cotton and transforming it into surgical cotton and in the
said the Hon’ble Apex Court has held as under :-
“33. For both these commodities operational territories are different and
both have a different consumer segments. For medical and pharmaceutical
purposes, use of ordinary cotton is not permissible. The fixed medical
standards for the quality of surgical cotton are definite and definable such
that ordinary cotton would not suffice the purpose. Surgical cotton is only
used in form of medicine or pharmaceutical product, thus it cannot be said
that use of commodity is interchangeable and in that view of the matter,
surgical cotton is a different commodity. It is a commodity which is used
with a completely distinct identity in itself. As what is used for medical
purpose is perfectly sterilized disinfected purified cotton. If raw cotton is
used for surgical purposes, it would be counter-productive. Surgical cotton
is extensively used for making napkins, sanitary pads and filters, etc. The
surgical cotton is exclusively consumed into medical field while ordinary
cotton has so many uses. The main chemical properties desired in a surgical
dressing are inertness and lack of irritation in use, which is provided by the
surgical cotton only if manufactured as per the standards specified. Raw
cotton is purified by a series of processes and rendered hydrophilic in char-
acter and free from other external organic impurities for use in surgical
dressings. Surgical cotton is, thus, completely different from ordinary cot-
ton.

EXCISE LAW TIMES  1st April 2020  346