Collector of Central Excise, Madras vs Kutty Flush Doors and Furniture Co. (P) Ltd.

Sabyasachi Mukharji, J.—This is an appeal u/s 35L(b) of the Central Excise and Salt Act, 1944 (hereinafter called 'the Act'). The appeal is directed against the Order of the Customs Excise and Gold (Control) Appellate Tribunal (hereinafter called 'the CEGAT').

The respondent herein filed a classification list on 16th March, 1982 seeking approval of Sawn timber and dried timber as non-excisable. The submission of the respondent was that timber logs were only sawn into sizes and these did not tantamount to any manufacture. However, the Assistant Collector, Madras, held that the conversion of timber logs into sawn timber satisfied the conditions of manufacture insofar as the conversion of timber logs into sawn timber involves transformation whereby a new and different article with the distinct name, character or use emerges which is different from timber logs. It was held accordingly that excise duty @ 8% ad valorem under Tariff Item 68 of the erstwhile Central Excise Tariff was leviable.

The respondent filed an appeal before the Collector of Appeals who concurred with the Assistant Collector upholding the duty. Aggrieved thereby the respondent filed an appeal before the CEGAT.

The Tribunal in the Judgment under appeal, relied on its decision in the case of 1984 ECR 726 and the Karnataka High Court in the case of Y. Moideen Kunhi and Others Vs. Collector of Central Excise, Bangalore and Others, and came to the conclusion that no new product emerges by sawing of timber into several sizes. In the premises the Tribunal allowed the appeal of the respondent. Hence, this appeal.

It is well-settled that excise-duty becomes chargeable only when a new and different article emerges having a distinct name, character and use. See in this connection the observations of this Court in Union of India v. Delhi Cloth & General Mills [1963] 1 Su SCR 586 and South Bihar Sugar Mills Ltd., etc. Vs. Union of India (UOI) and Others, . This principle is well-settled. This is a question of fact depending upon the relevant material whether as a result of activity, a new and different article emerges having a distinct name, character and use. The use of expression 'manufacture' was explained in the case of Allenbury Engineers Pvt. Ltd. Vs. Ramkrishna Dalmia and Others, . In State of Orissa and Others Vs. Titaghur Paper Mills Company Limited and Another, which was a decision on the Orissa Sales Tax Act, this question was considered in the background of the fact whether planks, cut into sizes, etc., sawed out of logs, are different from logs in its nascent state.

It may be worthwhile to note 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 was necessary and there must be transformation; a new and different article must emerge having a distinct name, character or use. See Union of India v. Delhi Cloth Mills (supra) at page 596 of the report. Having regard to the facts found in this case by the Tribunal, which ultimately is the final fact finding authority, we are of the opinion that regard being had to the principles for determining the questions which were correctly applied in the decision of the Tribunal, in the facts of this case, the conclusion of the Tribunal is unassailable.

In the premises there is no merit in this appeal and the same is accordingly dismissed.