SARASWATI INDUSTRIAL SYNDICATE LTD Vs. UNION OF INDIA

JUDGEMENT

(1.) WHETHER the repairs/reconditioning (reshelling) of the old, worn out and used Sugar Mill Rollers by the petitioner amounts to manufacture and is exigible to excise duty under Item No. 68 of Schedule I of the Central Excises and Salt Act, 1944 ('the Act' for short) is the spinal issue that has come up for adjudication in this writ petition.

(2.) THE facts are not disputed and lie in a narrow compass. The Saraswati Industrial Syndicate Limited, Yamunanagar, District Ambala, Haryana ~ petitioner is a public limited company. The Indian Sugar and General Engineering Corporation, Yamunanagar, District Ambala, Haryana (hereinafter referred to as MSGEC) is its heavy engineering unit, which is engaged in the manufacture and production of heavy engineering machine! and plants for Sugar Mills etc. The petitioner is also running a foundary in the premises of ISGEC. The petitioner, receives old, used and worn ou Sugar Mill Rollers for the purpose of reshelling. The petitioner, however calls this process as repair or reconditioning of the Sugar Mill Rollers. Thi Sugar Mill Roller consists of two parts, i. e. 'shaft' and 'shell'. On receipt o the worn out roller, the shell which is made of cast iron is broken into pieces The shaft, however, is left absolutely untouched. The broken pieces of th cast-iron are melted after addition of nominal material to compensate fo the worn out and lost part of the shell and to account for burning/meltin] losses during the actual casting opsrations. This material is recast and shrunl on the shaft. This process involves heating of the shell and inserting the shaf vertically. On coiling the shell the casting grips the shaft. Thereafter the shell is machined and grooved. Then this Sugar Mill Roller is delivered t the customer. According to the petitioner, the price of Sugar Mill Rolle ranges between Rs. 1,60,000/- to Rs. 2,50,000/depending on the size The cost of reshelling services rendered by the petitioner is generally betweei Rs. 11,000/- added by the petitioner to make up the deficiency as mentions above.

(3.) THE controversy between the parties relates to as to whether th process undertaken by the petitioner to render old, worm out Sugar Mil Roller into serviceable one is 'manufacture' as contemplated by Section 2 (f) of the Act, and Tariff Item 68 of Schedule I to the Act. Th petitioner-firm contends that it only reconditions the shell of the old wor out Sugar Mill Roller and it does not manufacture the latter. The same ol Sugar Mill Roller after necessary repairs and reconditioning is returned to th customers. No change is carried out in the character, quality or user the old Sugar Mill Roller. The petitioner-firm does not produce any new c distinct marketable article. It does not turn out a commercially differei article from the one received by it.