ASSOCIATED PIGMENTS LIMITED Vs. COLLECTOR OF CENTRAL EXCISE

JUDGEMENT

(1.) In this three Rules the main question is whether or not the petitioner company, was entitled to claim exemption from payment of excise duty in respect of lead suboxide and lead monoxide manufactured in its factory in terms of the Notification No. 119/75-C.E., dated 30th April, 1975 issued by the Government of India in exercise of the powers conferred by Rule 8(1) of the Central Excise Rules, 1944.

(2.) The Finance Act, 1975 had inserted in the First Schedule of the Central Excises and Salt Act, 1944, now Tariff Item No. 68 under which "all other goods not elsewhere specified manufactured in a factory" became subject to duty at the specified rate. In the exercise of the powers conferred by Sub-rule (1) of Rule 8 of the Central Excise Rules, 1944, the Central Government by the aforesaid Notification No. 119/75-C.E., dated 30th April, 1975 had "exempt goods falling under Item No. 68 of the First Schedule to the Central Excises and Salt Act, 1944 (I of 1944) manufactured in a factory as a job work from so much of the duty of excise leviable thereon as is in excess of the duty calculated on the basis of the amount charged for the job work. During the material period, the petitioner used to receive pig lead or lead ingots from its customers for conversion into lead suboxide and lead monoxide. After subjecting the said lead to the process, mentioned in paragraph 3 of the writ petition filed in C.R. No. 12 (w) of 1981, the petitioner returned the finished products to its customers and charged the agreed price for the said process. The petitioner itself did not supply any material for manufacture of lead sub-oxide and lead monoxide (lithergo) and the petitioner has claimed that in undertaking the aforesaid manufacturing process it performed job work and it was entitled to exemption in terms of the Notification No. 119/75-C.E., dated 30th April, 1975.

(3.) The respondents have disputed the petitioner's' claim for such exemption on the ground that pure lead supplied by the petitioner's customers after undergoing manufacturing process became entirely new articles or goods, namely, lead suboxide, and lead monoxide, whose character, use and name in trade parlance were different from pure lead supplied by the petitioner's customers. Only in case the article which is supplied by the customer after some manufacturing process is returned, exemption from the payment of duty could be claimed under the said Notification. In case, not, the same article supplied by the customers but an entirely new article is returned, the person who undertakes manufacturing process cannot claim exemption in terms of the Notification No. 119/75-C.E., dated 30th April, 1975. In other words, in terms of the said Notification goods falling under Item No. 68 of the First Schedule of the Act 1 of 1944 qualify for exemption only in case articles supplied to the job worker even after undergoing manufacturing process continued to be the same articles or goods.