S.H. Sheth, J.
1. The petitioner is a company incorporated under the Companies Act, 1956. It has a factory at Baroda where it had been manufacturing extruded aluminium collapsible tubes. The petitioner held a license for manufacturing extruded shapes and sections including extruded pipes and tubes. The license was granted to it by the Central Excise authorities under the Central Excises and Salt Act, 1944 (hereinafter referred to as 'the said Act' for the sake of brevity). On 3rd April, 1970 the petitioner surrendered its license to Central Excise authorities for cancellation. The Assistant Collector of Central Excise, Baroda cancelled it and informed the petitioner accordingly on 21st April, 1970.
2. Thereafter the petitioner started purchasing plain tubes and plain containers from the market and engaged itself in printing and lacquering them. Printed and lacquered tubes and containers were sold by it in the market to their consumers. On 25th February, 1971 the petitioner received from the Superintendent of Central Excise, Baroda, the letter dated 24th February, 1971 enquiring whether the petitioner had stopped all operations relating to the manufacture of extruded aluminium pipes and tubes including incidental and ancillary process of printing and lacquering them. On 2nd March, 1971 the petitioner replied to the Superintendent of Central Excise and stated that no Central Excise license was necessary for printing and/or lacquering duty paid extruded shapes and sections or tubes and pipes purchased by it from the market. It contended that no Central Excise duty was leviable on such printing and lacquering. The petitioner however stated that if the Superintendent of Central Excise did not accept the aforesaid view of the petitioner, he should hear the petitioner before taking any decision in the matter. On 22nd May, 1971, the petitioner received from the Superintendent of Central Excise notice dated 20th May, 1971 (hereinafter referred to 'the impugned notice') asking the petitioner to obtain the Central Excise L-4 license with immediate effect because according to him printing and/or lacquering was incidental to the process of manufacturing extruded shapes and sections or extruded tubes and pipes of aluminium. The petitioner appealed against the impugned notice to the Assistant Collector of Central Excise, Baroda on 15th June, 1971. The appeal was heard on 16th June, 1971 (hereinafter referred to as the 'impugned order'), the Assistant Collector dismissed the appeal.
3. It is against the impugned notice and the impugned order that this petition has been filed.
4. Mr. Bhatt who appears for the petitioner has raised before us only one contention. Though some other contentions have been raised in the petition by the petitioner they have not been convassed before us. The contention which Mr. Bhatt has raised is this.
5. Whether printing and lacquering of extruded shapes and sections or tubes and pipes of aluminium is liable to payment of duty under the said Act ?
6. In the impugned notice it has been stated that extruded tubes by themselves are not marketable unless they are printed in a distinguishable form. It is only printed extruded tubes which are according to the Central Excise authorities known to the market and consumed by the consumers. It has also been stated that the printing and lacquering of extruded tubes and pipes is a process which is incidental to the process of manufacture of the extruded tubes of aluminium. In the petition it has been denied that the plain unprinted and unlacquered tubes are not marketable. At Ex. G to the petition, the petitioner has annexed details showing the sale of plan (unprinted and unlacquered) tubes. At Ex. E to the petition there are some more details in that behalf. At Ex. F there are still more details showing the sale by the petitioner of plain collapsible tubes of aluminium to different persons. That plain collapsible tubes of aluminium are a marketable commodity and that they are purchased by consumers in the market have not been disputed before us. We, therefore, proceed to decide this petition on the footing that both plain collapsible tubes of aluminium as well as printed and lacquered tubes of aluminium are marketable commodities and that the consumers buy them.
7. In order to examine the contention raised by Mr. Bhatt it is necessary to turn to Section 3 of the said Act which is a charging section. It provides for levy and collection of duties of excise on all excisable goods other than salt and on salt manufactured in, or imported by land into any part of India at the rates set forth in the First Schedule to the said Act. The expression 'excisable goods' has been defined by Clause (d) of Section 2 in the following terms :
' 'Excisable goods' means goods specified in the First Schedule as being subject to a duty of excise and includes salt.'
If a person produces 'excisable goods' within the aforesaid meaning of that expression he has got to obtain a licence under Section 6 of the said Act. Section 3, Sub-section (1) read with the definition of 'excisable goods' given in Clause (d) of Section 2, takes us to the First Schedule. Item 27 in the First Schedule specifies aluminium. Sub-item (e) specifies the following commodity :
'Extruded shapes and sections including extruded pipes and tubes.'
The contention raised on behalf of the respondents is that printing and lacquering of duty paid plain extruded collapsible pipes and tubes of aluminium are covered by sub-item (e) of Item 27. The respondents have placed no reliance upon any other sub-item of Item 27. On the other hand Mr. Bhatt has contended that sub-item (e) of Item 27 has no application to the printing and lacquering of duty paid extruded pipes and tubes of aluminium.
8. Let us now see the connotation of sub-item (e) of Item 27. It is . not in dispute before us that the petitioners have been printing and lacquering only plain extruded tubes. We, therefore, examine sub-item (e) of Item 27 in that context. Sub-item (e) of Item 27 in the First Schedule read with Section 3(1) subjects to payment of excise duty manufacture of extruded tubes of aluminium. It is not in dispute that the petitioner has been purchasing plain extruded tubes of aluminium from the market and has been printing and lacquering them for its customers. The plain extruded tubes which the petitioners have been purchasing are all duty paid. When we read sub-item (e) of Item 27 in the light of Section 3, Sub-section .(1), there are two facts which clearly emerge thereform. The first fact is that there must be a manufacture of tubes of aluminium and the second is that they must have been manufactured by applying the process of extrusion. Plain extruded tubes which the petitioners have been purchasing from the market were already manufactured by other manufacturers. The process of extrusion was applied to their manufacture by other manufacturers before they were turned out as finished goods and placed in the market for sale. The question which therefore arises is this :
9. By printing and lacquering the plain extruded tubes of aluminium do the petitioners firstly apply any further process of extrusion to them and do they thereby manufacture tubes ?
10. Mr. Shelat appearing for the respondents has not been able to tell us that the printing and lacquering of plain extruded tubes of aluminium require any application of the process of extrusion. Mr. Bhatt has on the other hand categorically stated to us that mere printing and lacquering of plain extruded tubes do not require application of any process of extrusion. So far as the tubes are concerned extrusion means process of forming the tube from a metal slug or dump; That is how the connotation of 'extrusion' has been explained in Indian Standard (revised edition, October, 1966) published by the Indian Standards Institution. If extrusion means the process of forming a tube from a metal slug or dump, it was already applied when the manufacturer of a plain extruded aluminium tube manufactured it. Printing and lacquering do not involve the process of forming a tube from a metal slug or dump which extrusion means. It is therefore clear that since printing and lacquering of plain extruded tubes do not require application of any further process of extrusion, it cannot be covered by sub-item (e) of Item 27. Secondly by printing and lacquering plain extruded tubes, can the petitioners be said to manufacture aluminium tubes This is the second aspect which emerges from the analysis of sub-item (e) of Item 27. 'Manufacture' has been defined by Clause (f) of Section 2 in the following terms :
'Manufacture' includes any process incidental or ancillary to the completion of a manufactured product....'
The tubes which the petitioners have been printing and lacquering were already manufactured by other manufacturers. Is the process of printing and lacquering them incidental or ancillary to the completion of manufacture of such a tube The definition of 'manufacture' given in Clause (f) clearly suggests that any process before it is regarded an incidental or ancillary to the completion of a manufactured product must have some relation to the manufacture of a finished product. However, unessential that process may be if it is incidental or ancillary to the completion of a manufactured product then that process falls within the compass of the expression 'manufacture'. Printing and lacquering cannot be said to be incidental or ancillary to the completion of manufacture of the product. They have no relation to the completion of manufacture of tubes because unprinted and unlacquered tubes are by themselves a marketable commodity requiring nothing else for completing their manufacture. Printing and lacquering are therefore not even remotely connected with the completion of the manufacture of aluminium tubes. It is a process which is independent of the manufacture of aluminium tubes. It is applied for the purpose of enhancing their salability and not for completing their manufacture. If such a commodity is subjected to central excise duty after it has been once paid on the plain extruded tubes, it will not be a duty on the manufacture of extruded iluminium tubes but it will be a duty on the sale of that commodity. We are therefore of the opinion that the printing and lacquering of plain extruded aluminium do not fall within the ambit of sub-item (e) of Item 27. This is our view on the plain reading of the said sub-item (e) of Item 27 in the light of the provisions of Sub-section (I) of Section 3 of the said Act.
11. A few decisions have been cited before us in this behalf. We now turn to them. In South Bihar Sugar Mills v. Union of India, AIR 1968 SC 922 the Supreme Court was concerned with Item 14H in Schedule I to the said Act which specifies compressed liquefied or solidified gases more particularly described therein. It was a case where in the process . of manufacture of sugar by carbonisation process and in the process of manufacture of soda ash by solvay ammonia soda process, a manufacturer required carbon dioxide for the purpose of producing those two commodities. The manufacturer in that case had therefore set up a lime kiln which also generated kiln gas. The question which arose was whether kiln gas which the lime kiln produced was subject to excise duty under Item 14H which inter alia particularised carbon dioxide and compressed carbon dioxide. It is in that connection that the Supreme Court examined the definition of the expression 'manufacture' given in Section 2(f) of the said Act. It has laid down that word 'manufacture' implies a change but every change in the raw material is not manufacture. There must be such a transformation that a new and different article must emerge having a distinctive name, character, or use. The said Act does not define goods. The Legislature therefore must be taken to have used every word in its ordinary dictionary meaning. The dictionary meaning is that to become 'goods' it must be something which can be ordinary come to the market to be bought and sold and is known to the market. In other words a new substance must be brought into existence from raw material. The test which the Supreme Court has therefore laid down is the test of distinctive name, character or use of the new substance which is brought into existence from materials.
12. In the instant case if we apply the aforesaid test we come to the inescapable conclusion that a printed and lacquered extruded aluminium tube does not have in relation to a plain extruded tube any distinctive name, or character use. Both can be used for the same purpose. Both enjoy the same character. Both bear the same name. The printed and lacquered extruded tube cannot be said by any stretch of imagination to be a new substance distinguishable from plain extruded tube. The first test laid down by the Supreme Court in the aforesaid decision therefore produces an answer in favour of the petitioner. It has been laid down by the Supreme Court that Central Excise duty is a tax on manufacture and not on sale. Since in our opinion the printed and lacquered extruded tubes do not involve any process incidental or ancillary to the completion of the manufactured product, to uphold the contention raised by Mr. Shelat will be to uphold the imposition of Central Excise duty not on the manufacture of extruded tubes on which duty is already paid once but on the sale of printed and lacquered extruded tubes. We are, therefore, of the opinion that by printing and lacquering plain extruded tubes no different tariff item is brought into existence by the petitioner. The petitioner is, therefore, not liable to take out a licence for printing and lacquering them because it has been for the aforesaid purpose purchasing plain extruded duty-paid tubes from the market.
13. The next decision which has been cited before us is in Allenbury Engineers Pvt. Ltd. v. Ramkrishana Dalmia,;(1973) 1 SSC 7. A similar question in that case arose. While construing the expression 'manufacture'. it has been laid down by the Supreme Court that 'manufacture' implies a change but that every change is not manufacture though every change is not manufacture though every change in an article is the result of treatment, labour and manipulation. In order to satisfy the test of 'manufacture' it is necessary that there must be transformation, that is to say, a new and different article must emerge having a distinctive name, character or use. The transformation which is necessary in order to satisfy the test of 'manufacture' must be of corporeal and substantial nature. The test laid down by the Supreme Court in the case of (supra) has been followed in the subsequent case of (supra). The tests laid down by these two decisions, for the reasons stated above, have not been satisfied in the instant case.
14. The third decision is in Union of India v. Delhi Cloth and General Mills and Co. Ltd., AIR 1963 SC 791. In that case the Supreme Court was concerned with the chargeability of excise duty on the manufacture of Vanaspati under Items 12 and 13 of Schedule I to the said Act. It has been laid down in that decision that though manufacturing requires application of some sort of processes every processing cannot be equated to manufacture. Manufacture brings into existence, the Supreme Court has observed, a new substance and does not merely produce some change in substance, however minors in consequence it may be. This distinction has been brought out by the Supreme Court by relying upon the elaborate meaning of the expression 'manufacture' given in permanent Edition of Words and Phrases, Volume 26. The passage quoted by the Supreme Court in that decision is in the following terms : -
' 'Manufacture' implies a change but every change is not manufacture, and yet every change of an article is the result of treatment, labour and manipulation. But something more is necessary and there must be transformation; a new and different article must emerge having distinctive name, character of use.'
15. The printing and the lacquering of plain extruded tubes no doubt mean some change in the form of that article but they do not bring into existence a new article or substance altogether. The tube remains a tube and whether printed and lacquered or not, it is used for the purpose for which a plain extruded tube is used. Therefore printing and lacquering change the form of the extruded tubes but they do not bring into existence a new substance altogether which can be put to a use different from one to which a plain extruded tube is put. It does not enjoy a plain extruded tube enjoys and it does not bear a name distinguishable from that of a plain extruded tube.
16. The last decision which has been cited before us is in Union of India v. Hindu Undivided Family Business known as Ramlal Mansukhrai Rewari, AIR 1971 SC 2333. In that case the Supreme Court was concerned with Item 26A in the First Schedule to the said Act. It specifies copper and copper alloys in different forms and shapes. At the stage where copper billets were rolled into circles, the excise duty was levied because the manufacture of circles was complete. Therefore, in that case copper circles so manufactured became liable to excise duty at the rate mentioned against Item No. 26A (2). It was contended by the respondents to that case that copper circles which were subjected to payment of excise duty were uncut circles manufactured by rolling mills after rolling copper billets. Later on these uncut circles were trimmed and were converted .into utensils and sold as such in the market. Now Item 26A(2) as it was in force then mentioned amongst other things the manufacture of circles in any form or size. The Supreme Court, therefore, held that the manufacture of circles cut or uncut, was liable to payment of excise duty and negatived the argument that uncut circles cannot be held to be circles specified in the said Item. While placing that construction upon sub-item (2) of Item 26A, it took into account the expression 'in any form or size' which was applicable to the expression 'circles'. It was further argued that those uncut circles were trimmed and converted into utensils. The argument that only trimmed circles can be treated as circles and as finished product for the purpose of Item 26A was turned down on the strength of the expression 'circles in any form or size' used in that Item. It was held on the construction of the said Item that the Legislature was aware that billets were converted into circles and that excise duty should be leviable both at the stage of manufacture of billets and at the stage of manufacture of circles. The argument advanced on behalf of the manufacturer was turned down because Item 26A clearly disclosed the intention of the Legislature to levy central exciseduty at both stages - on billets as well as on circles. This decision cited by Mr. She latdoes not help him in establishing his contention because we are unable to read in Item 27 any intention on the part of the Legislature to levy central exciseduty both on the manufacture of plain extruded tubes and on the printing and lacquering of such extruded tubes. Whenever Legislature wanted to spread a wider sweep it has done so. Item 26A(2) furnishes one such instance by using the expression 'in any form or size'. Item 27(b) also furnishes an illustration of this type where the Legislature has used the expression 'in . any form or size' in respect of such manufactures as plates, sheets, circles and strips. Item 29A(3) used the expression 'all sorts' in relation to parts of refrigerating and air-conditioning appliances and machinery. In a similar context sub-item (2) of Item 26B uses the expression 'in any form or size'. So also Item 26AA(ii) uses in a similar context the expression 'all sorts'. These are some of the illustrations which we have culled out from the first Schedule to the said Act in order to show that wherever the Legislature wanted to cast a wide net in order to embrace a commodity or an article in all its conceivable forms it has done so. We do not find a similar attempt on the part of the Legislature in Item 27. We are therefore of the opinion that only those goods which answer the description of extruded tubes of aluminium in the context of the present case are liable to payment of excise duty... We are therefore unable to uphold the argument advanced by Mr. Shelat that the printed and lacquered extruded tubes of aluminium are different commodities distinguishable from plain extruded tubes and therefore liable to payment of central excise duty.
17. In the light of the view which we have expressed above, we are of the opinion that the petitioner is not liable to take out a license under Section 6 of the said Act for the purpose of carrying on its business activity of printing and lacquering plain extruded tubes of aluminium. The impugned notice issued by the respondent No. 1 to the petitioner and the impugned order made by the respondent No. 2 on appeal are therefore clearly void in law and cannot be sustain. They are ultra vires their powers under the said Act. They must therefore be quashed.
18. In the result we allow the petition and issue a writ of Certiorari quashing and setting aside the impugned notice and the impugned order and issue a writ of Mandamus directing the respondents to desist from enforcing them against the petitioner. Rule is made absolute with costs.