PHOENIX MILLS LTD Vs. UNION OF INDIA

JUDGEMENT

(1.) THE short issue involved in the present petition relates to the excisability of the preparation of printing paste by the petitioners. The Facts:

(2.) THE facts giving rise to the present petition as stated in the petition are that the Petitioners are, inter alia, engaged in the manufacture of cotton fabrics and manmade fabrics. To carry out the printing operation the petitioners are required to make printing paste by using, inter alia, various duty paid organic dyes which they purchase from the dye-stuff manufacturers. The printing paste in an ad-hoc preparation. According to the petitioners, for making a pigment printing paste, formulated, standardized and prepared forms of pigments emulsions are used as ingredients and/or mixed in different concentrations with other essential ingredients because the final printing paste does not contain the standard amount of pigment since the depth of shade required varies in the final design produced on the fabrics. According to the petitioners, printing paste is not a marketable commodity but tailor made item to suit the requirements of the mill, fabric design and the machine on which it has to be used to fix the print on the fabric. Only the individual mill can use the printing paste prepared by the printing master.

(3.) THE Tariff Act came into force with effect from 28th February 1986. By virtue of Trade Notice No. 48/86 dated 14th July 1986, the Collectorate clarified that the Chapter Note 6 would apply only to conversion of unformulated/unstandardised on unprepared forms into formulated, standardized or prepared forms ready for use and that mere re-packing or re-labeling of duty paid dyes would not amount to manufacture as no new product emerges. Similarly, the addition to various ingredients as set out therein or mixing of two or more formulated standardized and prepared dyes undertaking in the preparation of dye bath for dying and printing purposes would not amount to manufacture as these processes were basically in relation to use of such formulated, standardized and prepared forms.