1. The Corporation of Madras, the petitioner herein is haying a general workshop at Madras where iron and steel products like cast iron pipes arc manufactured for its own purposes like lighting, drainage, water supply etc. During the period 24.04.1962 and 28.02.1964, the value of the iron and steel products so manufactured by it was Rs. 2,53,226.37. The Central Excise authority took the view that as iron and steel products were liable to bear excise duty under the Central Excises and Salt Act, 1944, the petitioner was liable to pay an excise duty of Rs. 1,266.32 on the value of the said products manufactured and issued a demand for the said sum. The petitioner filed its objections to the same on the ground inter alia that it is not manufacturing these Items for sale and that it was a quasi-Government institution. The said contention was not accepted by the first respondent, the Assistant Collector of Central Excise, who passed an order dated 17.10.67, confirming the demand. The petitioner thereafter preferred an appeal to the Collector of Central Excise, the second respondent herein, contending that the manufacture of the products by it would not come under the definition of 'manufacture' under Section 2(f) of the Act as it then stood, since the manufactured was not for sale. The second respondent also rejected the petitioner's contention holding that under Section 3 of the Act articles manufactured in its workshop are liable to excise duty and that was no distinction made between the goods manufactured for sale and those manufactured for one's own use, in the matter of Central Excise levy. It is to quash the said order of the second respondent, the present writ petition has been filed.
2. According to the petitioner, the definition of the word 'manufacture' in Section 2(f) takes colour from the allied definition of 'manufacturer' occurring in the same section, that the definition of 'manufacturer' as it then stood took in only such persons who were engaged in the production or manufacture of excisable goods intending to sell, and that it did not include persons manufacturing excisable goods for his own purposes without any commercial motive. According to the learned couusel for the petitioner the manufacture of excisable goods by a person without any commercial motive will not come under the definition of 'manufacture' and therefore no excise duty is leviable on such goods Under Section 3. We are not able to accept the petitioner's stand. The definitions of 'manufacture' and 'manufacturer in Section 2(f) of the Act as it stood then and after its amendment by Central Act V of 1964 are set out below so far as they are relevant for the purpose of this case.
Before Amendment After Amendment'Manufacture' includes any 'Manufacture' includes anyprocess incidental or process incidental orancillary to the completion ancillary to the completionof a manufactured product; of a manufactured product;. . . The word . . . The word'manufacturer' shall be 'manufacturer' shall beconstrued accordingly and construed accordingly andshall include not only a shall include not only aperson who employes hired person who employes hiredlabour in the production or labour in the production ormanufacture of excisable manufacture of excisablegoods, but also any person goods, but also any personwho engages in their who engages in theirproduction or manufacture on production or manufacture onhis own account if those are his own account.intended for sale.
Section 3(1) which is the charging section is as follows :
'There shall be levied and collected in such manner as may be prescribed duties of excise on all excisable goods other than salt which are produced or manufactured in India, and a duty on salt manufactured in, or imported by and into any part of India, as, and at the rates, set forth in the First Schedule.'
3. The petitioner does not dispute the fact that the products manufactured in this case are excisable goods but what it states is that though the goods manufactured by it are excisable goods, there can be no charge under Section 3 as the products were not intended for sale. It is not possible to accept the petitioner's contention that Section 3 imposed a levy only on a person who manufactures goods for sale. We are not inclined to construe the definition of manufacturer' as delimiting the scope of either the definition of'manufacture' or the charge or imposition under Section 3.
4. It cannot be disputed that after the amendment of Section 2(f) by the Central Act V of 1964 there cannot be any distinction between the manufacture of goods for sale and the manufacture of goods for one's own purposes other than sale. In bur view even under Section 2(f) as it originally stood, the position could not have been different, The change brought about by the amending Act V of 1964 was only in the definition of manufacturer. The definition of the word 'manufacturer' under Section 2(f) is so wide as to include any process incidental or ancillary for the manufacture of a product, and the word 'manufacture' has to be construed accordingly. It is true that the last portion of the definition of 'manufacturer' says that it will include not only a person who employs hired labour in the production or manufacture of excisable goods, but also any person who is engaged in their production or manufacture on his own account if the goods are intended for sale. It may be that the petitioner'may not be said to be a manufacturer if the goods manufactured by it are not intended for sale. But Section 3 does not make any reference to a 'manufacturer', and according to that Section excisable goods will be liable to duty whether they were meant for own consumption or for f ale. There appears to be no warrant for importing the definition of 'manufacturer' in Section 3(1). it may be that, having regard to the definition of 'manufacturer' as it then stood the petitioner may not be liable to be proceeded against as a 'manufacturer' under the provisions of the Act and the rules framed thereunder. But that does not mean the products are not liable to excise duty. As already stated, Section 3 does not make a distinction between the goods manufactured for one's own consumption and those for sale. It is well established that in the matter of levy of excise duty the notion of commerce or trade cannot be imported. The will be clear from the following passage in Mrs. Chhotabhai v. Union of India, : AIR1962SC1006 -
'In our view, a duty of excise is a tax levy on home-produced goods of a specified class or description, the duty being calculated according to the quantity or value of the goods and which is levied because of the mere fact of the goods having been produced or manufactured and unrelated to and not dependent on any commercial transaction in them. The duty in the present case satisfied this test and therefore it is unnecessary to this test and therefore it is unnecessary to seek other grounds for sustaining the validity of the tax.'
5. In the foregoing circumstances, the petitioner's contention has to be rejected. The writ petition is therefore dismissed, but under the circumstances, without costs.