CCE Vs. LIPI DATA SYSTEMS LTD.

JUDGEMENT

(1.) The issue involved in this appeal, filed by the Commissioner, Central Excise, is whether the process of conversion of Empty Laser Toner Cartidge into Laser Printer Cartidge, undertaken by the Respondents, M/s. Lipi Data Systems Ltd., amounts to manufacture for purpose of levying Central Excise duty.

(2.) Shri V. Valte, learned SDR, submitted that the old and used cartidge are completely disassembled and critical worn out parts are replaced by new material/components; that thus the old and used cartidges lose their identity and what remains are the components obtained for manufacture of Laser Printer Cartidge; that major parts like Toner seal, seal full Tab, doctor blade, OPC drum, wiper blades are replaced with new components; that using these components, two subassemblies i.e. developer unit and waste unit are assembled and joined to make a complete Laser Printer Cartdige; that the cartidges are then repainted to give them a new look and the Respondent's brand name "LIPI" is affixed thereon; that these cartidges are tested for print quality, packed and sold in the market alongwith warranty;' that thus by applying the said process the Respondents are converting empty laser toner cartidges into laser printer cartidges, a commercially distinct commodity which can be used for printing; that the process undertaken by them is ancillary to the completion of their end product i.e.Laser Printer Cartidge and, therefore, falls within the defintion of "manufacture" under Section 2(f) of the Central Excise Act. The learned SDR also mentioned that earlier the Respondents themselves were clearing the impugned goods on payment of duty; that thus they themselves were treating the process of conversion as a process of manufacture; that now by declaring the process as a repair, their intention appears to be avoidance of duty burden.

(3.) The learned SDR also contended that the two fold test laid down by the Supreme Court in UOI v. J.G. Glass Industries Ltd. is satisfied in the present matter as the process taken up by the Respondents brings into existence a commercially different product and further the empty laser toner cartidge is of no use and it cannot do printing whereas the end product laser printer cartidge is used for printing. He, finally, mentioned that there is vast difference in the prices of both products in as much as the empty cartidge is procured for Rs. 125 to Rs. 200/ - whereas the end product is being sold for Rs. 1850/ - to Rs. 2150/ -; that the value addition reveals that the empty cartidges have not been repaired rather they have undergone a complete process of manufacture.