BUSH INDIA LTD Vs. UNION OF INDIA

JUDGEMENT

(1.) The only point which we are required to decide in this Special Civil Application is whether by placing certain record changer decks imported by the petitioner-company, on a wooden base with a cover,amounts to the manufacture of a new and different article within the meaning of sec. 2(f) of the Central Excises and Salt Act,1944(referred to hereafter as "the Act").

(2.) The petitioner is a limited company carrying on business of manufacturing radios and allied equipment. The petitioner import ed from the United Kingdom, Garrard record changers in the form of Garrard record changer decks which were completely finished articles,ready for use and capable of being used either in the form in which they were imported or after placing them on a wooden base with a cover. These decks so imported by the petitioner were mechanically, electrically and functionally com plete. The petitioner installed these record changer decks on a wooden base manufactured by the petitioner,or at its order, and sold them under the trade name of "Bush Auto Changer".At all relevant times, import duty was payable on the record changer decks imported by the petitioner-company. Countervailing duty was also payable under the provisions of the Indian Tariff Act. For the purpose of the payment of the countervailing duty, the im ported record changer decks were treated as being in a fully assembled condition and not as components and parts of record changers or gramophones. The petitioner-company was accordingly assessed to countervailing duty at 20% which it paid, and not at the countervailing rate of duty at 30% which would have been payable had the record changer decks been treated for the purpose of countervailing duty as components or parts of record changers or gramophones.

(3.) On 9th July 1966, Central Government issued a Notification No. 112 of 1966 whereunder all parts and accessories of electrically or battery operated gramophones,record players,etc.,other than turn- tables,were therefore rely exempt from the payment of Cen tral Excise duty. No duty was therefore payable on the wooden bases used in making electrically or battery-operated record players. On 11th July, 1970, the petitioner addressed a letter to the Assistant Collector of Central Excise, Bombay, pointing out the aforesaid fact and seeking a clarification as to whether any excise duty was payable on the Bush Auto Changers removed by the petitioner-company from its factory Apparently no specific reply was vouchsafed to this query by the Assistant Collector,who informed the petitioner-company that it could, if it so desired, avail itself of the procedure under Rule 56A, so that it could, it would be entitled to set off against the excise duty payable on the auto-changers, the amount paid as countervailing duty on the import of the record changer decks. The thereupon availed itself of the procedure under Rule 56A of the Central Excise Rules, 1944.In March 1971, the petitioner -company was advised that on a true interpretation of the provisions of the Act, the assembly of the auto- changers,which consisted of placing the complete auto-changer decks each on a wooden base, could not be regarded as a manufacturing process and hence it was not liable to pay any excise duty on the said auto-changers. Thereupon, on 4th May 1971, the petitioner-company submitted a revised classification list to the Superintendent of Central Excise (namely the 2nd respondent) in which it was stated that no excise duty whatever was payable on the said auto-changers. On 7th July 1971 the 2nd respondent rejected the petitioner's classification list on the ground that as the Assistant Collector of Central Excise had permitted the petitioner-company to avail itself of the procedure under Rule 56A, it was clear that the Assistant Collector had treated the Bush Auto Changer Model as manufactured in the petitioner's factory. Thereupon, on 4th August 1971, the petitioner-company preferred the requisite appeal to the Appellate Collector of Central Excise (namely the 3rd respondent) who, after giving a personal hearing, passed his order dated 26th February 1973 rejecting the petitioner's appeal and holding that as the said Bush Auto Changers were manufactured in India, excise duty was leviable thereon. Against that order, the petitioner- company preferred its revision petition on 12th October 1973 to the Government of India, Ministry of Finance. After giving a personal hearing,the Joint Secretary to the Government of India passed his impugned order dated 10th October 1975,rejecting the revision petition, holding that-