P.R. Gokulakrishnan, C.J.
1. The petitioners want to dedare that the excise duty is not payable on the cloth processed by the petitioners and a writ has to be issued directing the respondents to refund the amount of excise duty so far recovered by the respondents on the processed cloth removed by the petitioners from their factory and for other consequential relief.
2. The main contention raised by the petitioners in all these Special Civil Applications is that the process they have made will not attract the definition of 'manufacture' given in Section 2(f) of the Central Excises and Salt Act, 1944, making them liable to pay the excise duty under Tariff Items Nos. 19 or 12 of the First Schedule to the Central Excises and Salt Act, 1944. In support of their claim, the petitioners relied upon the decision in the case of Vijay Textile and Anr. v. Union of India and Ors. reported in 20 Gujarat Law Reporter 944, wherein a Division Bench of this High Court has held that processing of cotton fabrics or man-made fabrics does not bring into existence any new woven stuff or substance and that it is merely processing in the sense of bleaching, dyeing or printing fabric which was already in existence. This decision of the Division Bench of our High Court has been overruled by the decision rendered by the Supreme Court in Writ Petition (Civil) No. 11728 of 1984 with Writ Petitions Nos. 13556, 13788 etc. of 1984, dated 6th May, 1985. In that decision, the Supreme Court had occasion to consider as to what is 'manufacture'. In that case, it has directly dealt with bleaching, dyeing and printing of cloth and has held that such processing will come under the manufacturing process. After disagreeing with the view expressed by the Gujarat High Court in the case of Vijay Textile and Anr. v. Union of India and Ors. reported in 20 Gujarat Law Reporter, page 944, the Supreme Court has observed that the process of bleaching, dyeing and printing etymologically also means manufacturing process. The Supreme Court has observed:
When the textile fabrics are subjected to the processes like bleaching, dyeing and printing etc. by independent processes, whether on their own account or on job charges basis, the value of the purpose of assessment under Section 4 of the Central Excise Act will not be the processing charges alone but the intrinsic value of the processed fabrics which is the price at which such fabrics are sold for the first time in the wholesale market. That is the effect of Section 4 of the Act. The value would naturally include the value of grey fabrics supplied to the independent processors for the processing, However, excise duty, if any, paid on the grey fabrics will be given proforma credit to the independent processors to be utilised for the payment on the processed fabrics in accordance with Rules 56A or 96D of the Central Excise Rules, as the case may be.
Thus it is clear from the facts of this case that the petitioners herein cannot have the concession they plead for and they will come under Tariff Items Nos. 19 and 22 liable to pay the excise duty.
Following the decision of the Supreme Court referred above, all these Special Civil Applications are dismissed.
Rule in each petition is discharged with costs.
3. The petitioners in these Special Civil Applications through their counsel pray that the collection of excise duty may be permitted to be paid instalments. Taking the facts, and circumstances of the present case, the petitioners are permitted to pay the excise duty payable by them in three equal instalments with interest at 12% per annum from today with the interval of two months in between and the first instalment is to be paid on the 5th of September, 1985.