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CASE NO.: Appeal (civil)  5572-5573 of 2000

PETITIONER: Hindustan Poles Corporation                              

RESPONDENT: Commissioner of Central Excise, Calcutta                 

DATE OF JUDGMENT: 27/03/2006

BENCH: Dr. AR.Lakshmanan & Dalveer Bhandari

JUDGMENT: J U D G M E N T

Dalveer Bhandari, J.

       A short question involved in these appeals is whether the  process undertaken by the appellants for bringing into  existence the resultant Stepped Transmission Poles amounts  to manufacture under the provisions of the Section 2(f) of the  Central Excises Act, 1944.    

       Section 2(f) of the said Act reads as under :         "Manufacture" includes any  process__  

       (i) incidental or ancillary to the   completion of a manufactured  product;

       (ii)    which is specified in relation to      any goods in the section or Chapter  notes of [The First Schedule] to the  Central Excise Tariff Act, 1985 (5 of  1986) as amounting to  [manufacture; or]

                The word "manufacture" is a compound word of Latin  origin derived from the words "manu," by hand and "facere," to  do, to make, to form; but the meaning is not confined to that  which is done by hand alone, but by machinery as well. (In re  Tecopa Min. Etc., Co. 110 Fed 120, 121.)    

       The following passage in the Permanent Edition of Words  and phrases was referred to with approval in Delhi Cloth and  General Mills AIR 1963 SC 791 at page 795 :         ’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 a  distinctive name, character or use.

                Our endeavour in the instant case would be to examine  the activity of the appellant in the light of legislative intention  as encompassed in the said definition.

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                In these appeals, the appellants have challenged the  show-cause-notice issued by the Additional Collector of  Central Excise, Calcutta \026 1.  The said notice was issued on  the ground that by the process of "welding" of electric resistant  pipes/tubes of different diameters, which are duty paid, and  purchased from the open market, results in a new product  and, hence, is liable to excise duty under the Residuary Entry  i.e. erstwhile Tariff Item 68 upto 27.2.1986, and thereafter  under Tariff Item 7308 the period from 28.2.1986.

       In pursuance to the Finance Minister’s Budget speech of  1984, a Study Group was constituted to review the Central  Excise Tariff with a view to rationalize it.  The Study Group in   its report has mainly recommended:-         (1)     To rationalize the Central Excise Tariff to make  it more scientific and detailed one duly supported  by formal Rules of Interpretation and clarificatory  notes so as to avoid classification disputes;         (2)     To omit non-specific Tariff Item 68 and to re- classify the goods covered by it under the respective  class of goods of new Tariff;         (3)     To incorporate the concept of ’Manufacture’ in  the selective Tariff entries, wherever needed;

       (4)     To minimize the multiplicity of effective rates of  duty;         (5)     To extend Proforma Credit/Set-off procedure to  all products with few exceptions;         (6)     To devise long term flawless scheme for  exemption to Small Scale Sector;         (7)     To provide for the issue of administrative  rulings on classification of goods;         (8)     Change in the departmental stand on  classification of goods to have prospective effect  only; and         (9)     Change in Excise procedures to make them  more simplified with a view to avoid complications  and disputes.

       Based on these recommendations of the Technical Study  Group, the Central Excise Tariff has been delinked from the  Central Excise Act and is an independent enactment.

       The main features of the new Excise Tariff are:-         (a)     Central Excise Tariff has been made more detailed  and comprehensive after taking into account all  Technical and Legal aspects.         (b)     It is based on a system of classification derived from  international convention of ’Harmonised Commodity  Description’ and ’Coding System’ (HSN) with such  "Contractions or Modifications" as are necessary to fall  within the scope of levy of Central Excise Duty.         (c)     Goods of the same class have been grouped together  to enable parity in treatment.         (d)     It contains Section/Chapter notes giving detailed  explanation as to the scope and ambit of the respective  Section/Chapter.  These notes have been given statutory  backing and have been incorporated at the top of each  Section/Chapter.         (e)     Special provision has been incorporated in  respective Chapters in relation to the goods which poses  problem in the matter of levy of excise duty.         (f)     General residuary Tariff Item 68 has been dispensed  with and instead residuary items have been provided

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separately for each class of goods under each Chapter.         (g)     Interpretative rules have also been provided to serve  as statutory guideline for interpreting the Tariff Schedule.         (h)     To preserve by and large the existing duty structure  to the extent  possible.         (i)     Government will have, for the first time, the power  to raise duty through notification in certain  circumstances but subject to limits provided in the  proposed enactment.         (j)     To continue the present practice of granting  exemption from duty under Rule 8 of the Central Excise  Rules.                  The other salient feature of the new Central Excise Tariff  is that it adopts the principle of classifying all goods beginning  with the raw materials and ending with the finished products  within the same Chapter.  Thus for the purpose of grouping  various products, the New Tariff does not distinguish between  the raw materials and semi-manufactured products and finally  manufactured products except for a few exceptions.  The New  Tariff is designed to group all goods relating to the same  industry and all the goods obtained from the same raw  material under one Chapter in a progressive manner.           These appeals arise out of two following show-cause- notices: SHOW CAUSE NOTICE       PERIOD                  AMOUNT 17.11.80                             1.8.85 to 31.1.89          Rs.2,41,333.98 11.1.90                     1.2.89 to 31.3.89           Rs.64,666                  According to the appellants, the process carried out is  mere joining of three pipes of different diameters with one  another to obtain the desired length.  This is done by a  process of welding of pipes.  The pipes do not lose their  original character, and get converted into something, which is  a commercially distinctive product.  Pipes/poles do not lose  their original character and identity as pipes.   The pipes  retain their character as pipes, hence, no process of  manufacture as per Section 2(f) of the Central Excise Act is  carried out.  According to the appellants, the duty paid pipes  which are purchased by the appellants are classified under  Tariff Item 26AA (iv) upto 27.2.1986 and thereafter under  Tariff Item 7306.90 as pipes from 28.2.1986.

       Tariff Item 26AA(iv) reads as under:         "Item No. 26AA(iv): Pipes and tubes (including  blanks therefore) all sorts, whether rolled, forged,  spun, cast, drawn, annealed, welded or extruded."           After 28.2.1986, the said pipes were classified under Sub- heading 7306.90 of the Schedule, which reads as under:         "Heading No. 73.06:  Other tubes, pipes and  hollow profiles (for example, open seam or welded,  riveted or similarly closed) of iron or steel."

       According to the appellants, the essence of manufacture  is the transformation of one item into another for marketable  purpose.    

       The appellants submitted that the Additional Collector of  Central Excise, Calcutta has erroneously relied upon the  judgment of the Central Excise & Gold (Control) Appellate  Tribunal (for short CEGAT) in the case of Associated Strips  Pvt. Ltd. vs. Collector of Central Excise.  This judgment has  been overruled by a judgment of this Court dated 22.7.1991

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passed in Civil Appeal No. 6212 of 1990 filed by the Associated  Strips Pvt. Ltd.  The respondent Department is seeking to  classify the poles manufactured by the appellants under Tariff  Item 7308.90 which is a Residuary Entry under Heading 73.08  pertaining to Structures.  According to the appellants, the  respondent Department has not discharged the burden of  proving how the poles fall under Residuary Entry of Structures  by mere process of welding.  The burden to prove manufacture  is always on the Revenue, as has been held by this Court in a  series of cases and reiterated in a recently decided case  Shyam Oil Cake Ltd. vs. Collector of Central Excise,  Jaipur reported in 2005(1) SCC 264.   

       Reverting to the facts of this case, the relevant part of the  show-cause-notice was sent by the respondent \026 Additional  Collector of Central Excise, Calcutta to the appellants on  11.1.1989 reads as under :-            "It appears that M/s. Hindustan Poles  Corporation, a partnership firm having their  office at 4A, Marcus Square, Calcutta-7 and  works at 120A, Manicktola Main Road,  Calcutta-54 (hereinafter referred to as the ’said  firm’) manufacturer of "Steel Tubular Poles"  (hereinafter referred to as the "said goods")  classifiable under Chapter Sub-heading No.  7308.90 of the Schedule to the Central Excise  Tariff Act, 1985 (5 of 1986) and which was  classifiable under Tariff Item 68 of the  erstwhile Central Excise Tariff before the  introduction of the Central Excise Tariff Act,  1985 have contravened the provision of  Section 6 of the Central Excises & Salt Act,  1944 (hereinafter referred to as the "said Act")  read with rule 174 and the provisions of rule  9(1), 173B, 173C, 173G(1) & (2) read with  rules 52A, and 173G(4) read with rules 53 and  54 and 226 of the Central Excise Rules 1944  (hereinafter referred to as the ’said rules’) with  the intent to evade payment of Central Excise  duty leviable on the said goods by suppressing  material fact relating to production and  clearance of the said goods and by abusing the  concession granted under Notification No.  178/85 dated 1.8.85 and No. 175/86 dated  1.3.86 as amended in as much as the said  company manufactured in and removed from  their works at 120A, Manicktola Main Road,  Calcutta-54."

It was further mentioned in the notice as under:

"3(b)(i)  In course of visit of works on  20.12.88 and from the statement dated  20.12.88 submitted by the said firm it was  learnt that the said goods are manufactured  from E.R.W. Tubes in three sections of suitable  length and thereafter the higher and smaller  dia pipes are made red hot and reduced to  relevant smaller dia pipes through manual  hammers.   Electric power is also used for  maintaining an uniformity during cutting of  big size pipes into smaller ones.  The higher  dia pipes will be such that smaller dia pipes

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are allowed to enter and cool by natural  process.   The joints of the above pipes are  swaged to give a circumferential grip at the  joints and the step of each reduction shall be  uniform and with a surface inclination of 45  degree at the transition point to shed water.   This is a new product viz. "Steel Tubular Poles"  has emerged out of the steel pipes (E.R.W.  Tubes) as stated aforesaid which is a  manufactured product within the meaning of  definition of "manufacture" as given in Section  2(f) of the said Act."

       The appellants immediately had sent reply to the said  notice.   The relevant portion of the reply reads as follows:         "2.4.           It was ascertained from a statement  given by us on 20.12.1988 that the process of  manufacture of the Poles is as follows:-          E.R.W. Tubes of different dia reduced at one  end to require smaller dia by red hot heat  where-in the tube of the smaller dia is inserted  through manual hammering in three section,  where-after the joints at the entering points  are swaged to give a circumferential grip with a  surface inclination of 45:      to shad water.   Power is used in cutting the pipes of bigger  length into smaller lengths.  The resultant  product, via, Pole thus emerges out as a new  article involving process of manufacture within  the meaning of Section 2(f) of the Act.

2.5.            Even though the joints of the three  sections of the Pole are welded during the course of  making the joints and the resultant Pole is painted  by using of paints and varnishes before delivery,  nothing was mentioned about the using of electric  arc welding used for welding the joints as also of  paints and varnishes used for painting, although it  was found on scrutiny of the Balance Sheet that a  regular and recurring expenses is incurred by us for  (a) cutting and welding, and (b) paints and  varnishes for painting."

In this reply, it is also mentioned that the process undertaken  by the appellants was merely joining pipes of three different  dias one with the other to desired length whereby no new  goods and/or article other than pipes does emerge out  inasmuch as even after such process of joining the pipes one  with the other they do not lose their identity as M. S. Welded  pipes and thus does not attract the mischief of Section 2(f) of  the Act, since the process of mere welding of pipes of three  different dias one with the other is not a process of  manufacture within the meaning of Section 2(f) of the Act.

       According to the order of the Collector of Central Excise,  Calcutta-I dated 30.7.1991 the process which had been  undertaken by the appellants is that the poles are brought out  under the new Tariff Item No. 7308.90 and the appellants are  under an obligation to pay duty and penalty.

       The appellants, aggrieved by the order of the Collector of  Central Excise, Calcutta, preferred Appeal Nos. E-SB-571 and  E-SB-582 of 1991 before the CEGAT.   CEGAT, while affirming

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the judgment of the Collector of Central Excise, stated that the  essence of manufacture is transformation of one item into  another for marketable purpose.  The resultant product, in the  instant case, is having a distinct name, character and use.   The same is the result of transformation by application of  labour.  According to the CEGAT, pipes and poles are two  different and distinct items known in the market.  As such, it  cannot be said that there is no process of manufacture  involved.   

       The appellants aggrieved by the said judgment have  approached this Court.  The appellants submitted that the  impugned order of the CEGAT is contrary to a series of  judgments of this Court.  Reference has been made to the case  of Indian Metals and Ferro Alloys vs. CCE reported in (1991)  Supp 1 SCC 125.  The facts of that case are very akin to the  facts of the case in hand.  In the said case, the appellant is a  manufacturer of pipes, tubes and poles made of iron and steel.   These products are generally used by the telephone and  telegraph departments of the Government of India, but can  also be used for purposes of transmission and lighting.  After  Tariff Item 26-AA was introduced w.e.f. 24.4.1962 in the First  Schedule to the Central Excise and Salt Act, 1944 the  Government of India issued a notification dated 1.3.1963  under Rule 8 of the Central Excise Rules by which "telegraph,  telephone and electric lighting and transmission poles falling  under Item 26-AA of the First Schedule of the Act" were  declared completely exempt from the duty.  Accordingly, the  appellant was not allowed to pay duty on the goods right from  1962 till 1975.  On 1.3.1975, the legislature introduced Tariff  Item 68 in the First Schedule to the Act covering "goods not  elsewhere prescribed".  Thereafter, the Superintendent of  Central Excise took the view that the poles in question  manufactured by the appellant were classifiable not under  Item 26-AA but under Item 68 of the Central Excise Tariff and  that, therefore, the appellant was liable to pay duty on all  goods manufactured by it from 1.1.1975 till the date of the  notice.  

       Tariff Item 26-AA was introduced w.e.f. 24.4.1962 in the  First Schedule to the Act.       On 1.1.1975, the legislature  introduced Tariff Item 68 in the First Schedule to the Act  covering "goods not elsewhere prescribed".  Even thereafter,  the appellant filed classification lists showing the poles as  falling under Item 26-AA and eligible for exemption under the  relevant notification (which had taken the place of the  notification of 1.3.1963).  These classification lists were  approved and the appellant continued to clear its goods  without paying duty till August 1982.   

       According to the findings of this Court, the appellant was  rightly classified under 26-AA before 1.3.1975.  The  introduction of Item 68 makes a difference to the  interpretation of Item 26-AA.  As observed by this Court, Item  68 was only intended as a residuary item.  It covers goods not  expressly mentioned in any of the earlier items.  If, as  assumed by the Tribunal, the poles manufactured were rightly  classified under Item 26-AA, the question of revising the  classification cannot arise merely because Item 68 is  introduced to bring into the tax net items not covered by the  various items set out in the schedule.   This Court further  observed that the real question, therefore, is whether the  goods manufactured by the appellant can be classified under  Item 26-AA.  The answer should be in the affirmative.  This  Court also observed as under:

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"The language of Tariff Item 26-AA is very wide.  It  covers iron and steel products of the descriptions  set out therein.  The sum and substance of the  description given by the Assistant Collector in the  assessment order is only (a) that the poles produced  by the appellant are not ordinary pipes and tubes  which convey a fluid from one place to another and  (b) that they are manufactured by a very elaborate  and sophisticated process.  So far as the first point  is concerned, it will be appreciated that, just as  pipes and tubes are generally intended to carry a  fluid from one place to another, the poles with  which we are concerned enable wires to be passed  through them for the transmission of electric  energy, a function not very very different in nature  from that of other ordinary pipes and tubes.  That  apart, even tubes and pipes are not always  necessarily used for such purpose.  They can be  used as flag masts or for purposes of scaffolding or  other purposes where they do not serve as a  medium for the transmission of a fluid.  This is not,  therefore, a sound objection.  In regard to the  second point, it is perhaps sufficient to point out  that sub-item (iv) of Item 26-AA refers to pipes and  tubes (including blanks thereof) all sorts, whether  rolled, forged, spun, cast, drawn, annealed, welded  or extruded.  It is comprehensive enough to take in  all sorts of pipes and tubes and even those obtained  by the processes of forging, drawing and so on.  The  ultimate product in the present case is merely a set  of pipes or tubes of different diameters attached to  one another by different methods.  The so-called  manufacture is nothing but the putting together of a  number of pipes or tubes by one or other of the  processes mentioned in the tariff item.   The goods  produced, therefore, do not cease to be iron and  steel products or pipes and tubes of the description  mentioned in Item 26-AA(iv).   It may not be also  correct to characterize them as a different  commercial commodity.  Some of them are called  poles, an expression which means "a long slender  piece of metal or wood commonly tapering and more  or less rounded".  Electric poles, being hollow ones,  are not much different from pipes or tubes.   The  statement that they are commercially distinct  commodities is merely based on their being called  ’poles’.  They are also available in the same market  in which normally pipes and tubes are otherwise  available.  Neither the circumstance that certain  processes are applied to the "mother" pipes or tubes  nor the fact that, in order to identify the particular  type of tube or pipe one needs, one may use  different names is sufficient to treat the article as a  commercially different commodity."

       This Court came to the conclusion that the goods of the  appellant in question were assessable to duty under Tariff  Item 26-AA.

       In Bharat Forge and Press Industries vs. CCE reported  in (1990) 1 SCC 532, this Court observed that Tariff Item 26- AA(iv) encompasses all sorts of pipes and tubes.  It calls for no  distinction between pipes and tubes manufactured out of  sheets, rods, bars, plates or billets and those turned out from

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larger pipes and tubes.   It is of no consequence whether the  pipes and tubes are manufactured by rolling, forging,  spinning, casting, drawing, annealing, welding or extruding.    The expression ’pipe fittings’ merely denotes that it is a pipe or  tube of a particular length, size or shape.  ’Pipe fittings’ do not  cease to be pipes and tubes, they are only a species thereof.   They are merely intended as accessories or supplements to the  larger pipes and tubes.   They are pipes and tubes made out of  pipes and tubes.   There is no change in their basic physical  properties and there is no change in their end use.  It cannot  be said that pipe fittings, though they may have a distinctive  name or badge of identification in the market, are not pipes  and tubes.  This use of the words "all sorts" and the reference  to the various processes by which the excisable item could be  manufactured set out in the tariff entry are comprehensive  enough to sweep within their fold the pipe fittings in question.

       This Court further held that the goods in question fell  under Item 26-AA(iv).  Tariff Item 68 is a residuary entry.   Unless the Department can establish that the goods in  question can by no conceivable process of reasoning be  brought under any of the tariff items, resort cannot be had to  the residuary item.  The Department’s anxiety to invoke the  residuary entry was held to be improper.   

       A Constitution Bench of this Court in Union of India v.  Delhi Cloth and General Mill Co. Ltd. \026 AIR 1963 SC 791  had attempted to decide the meaning of expression  ’manufacture’.  The Court held that ’manufacture’ which is  liable to excise duty under the Central Excise and Salt Act,  1944, must therefore be the "bringing into existence of a new  substance known to the market".

       In another Constitution Bench of this Court in Devi Dass  Gopal Krishnan & Ors. v. The State of Punjab & Ors.  reported in  Sales Tax Cases XX  (1967) page 430,  the Court  relied on the dictionary meaning of ’manufacture’ and  according to Court ’manufacture’ means ’transform or fashion  raw materials into a changed form for use’. The Court  observed that if by a process a different identity comes into  existence then it can be said to be ’manufacture’.                  In Empire Industries Ltd. v. Union of India - AIR 1986  SC 662, it was observed that manufacture is complete as soon  as by the application of one or more processes, the raw  material undergoes some change.  If a new substance is  brought into existence or if a new or different article having a  distinct name, character or use result from particular process,  such process or processes would amount  to manufacture.   Whether in a particular case manufacture has resulted by  process or not would depend on the facts and circumstances  of the particular case.

       A Constitution Bench of this Court in M/s Ujagar Prints  and Anr. v. Union of India & Ors. \026 AIR 1989 SC 516 -  followed the earlier decision in Empire Industries Ltd. v. Union  of India (supra).  While following the earlier judgment it was  held that if there should come into existence a new article with  distinct character and use as a result of the process, the  essential condition justifying manufacture of good is satisfied.

       This Court in Commissioner of Sales Tax, Orissa and  Anr. v. Jagannath Cotton Company and Anr. - (1995) 5  SCC 527 - mentioned that manufacture in its ordinary  connotation, signifies emergence of new and different goods as

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understood in relevant commercial circles.

       In Gramophone Co. of India Ltd. v. Collector of  Customs, Calcutta  \026 (2000) 1 SCC 549, this Court examined  earlier cases of this Court and held that  ’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 a distinctive name, character and use.  In this  case, the word ’manufacture’ has various shades of meaning  but unless defined under the Act it is to be interpreted in the  context of the object and the language used in the sections.     It would not be applicable in cases where only processing  activity is carried out.  Further, such production activity must  be by an industrial undertaking.

       In CCE vs. Markfed Vanaspati & Allied Industries  reported in (2003) 4 SCC 184, this Court clearly held that the  burden to prove that there is manufacture is on the Revenue.   In that case, the question arose was whether the goods  became excisable merely because it fell within a Tariff Item.     "Spent earth" was "earth" on which duty had been paid.  It  remained earth even after the processing.  Thus, if duty was to  be levied on it again, it would amount to levying double duty  on the same product.  This Court further observed that merely  because an item falls under Tariff Entry, it cannot be  presumed or deemed that there is manufacture.

       In the case of CCE vs. Technoweld Industries reported  in (2003) 11 SCC 798, the question was whether drawing of  wires wire rods amounted to manufacture.  It was held that  both the products were wires and merely because they were  covered by two separate entries did not mean that the product  was excisable.   It was held that in the absence of any  manufacture the product did not become excisable merely  because there were two separate entries.                    In the case of Metlex (I) (P) Ltd. vs. CCE reported in  (2005) 1 SCC 271, this Court observed that the entry makes  no distinction between ordinary film and film which is  lacquered or metallised or laminated.   The Court arrived at a  definite conclusion that a film remained a film and no new or  distinct product has come into existence.

       In Aman Marble Industries (P) Ltd. vs. CCE reported in  (2005) 1 SCC 279, the question arose whether cutting of  marble slabs amounted to manufacture for the purpose of  Central Excise Act.  This Court observed that after the activity  is completed a marble would remain marble.  Therefore, this  activity did not attract the tax.

       In Rajasthan SEB vs. Associated Stone Industries  reported in (2000) 6 SCC 141, this Court observed that the  word ’manufacture’ generally and in the ordinary parlance in  the absence of its definition in the Act should be understood to  mean bringing to existence a new and different article having a  distinctive name, character or use after undergoing some  transformation.  When no new product as such comes into  existence, there is no process of manufacture.  Cutting and  polishing stones into slabs is not a process of manufacture for  the obvious and simple reason that no new and distinct  commercial product came into existence as the end product  still remained stone and thus its original identity continued.    Ultimately, this Court held that it was also not possible to

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accept that excavation of stones and thereafter cutting and  polishing them into slabs resulted in any manufacture of  goods.

       The question for consideration in Shyam Oil Cake Ltd.’s  case (supra) was whether processing of the edible oil,  manufactured by the appellant, resulted in manufacture. This  Court held that neither in the section note nor in the chapter  note nor in the tariff item do we find any indication that the  process indicated is to amount to manufacture.  To start with,  the product was edible vegetable oil.  Even after refining, it  remained edible vegetable oil.  As actual manufacture has not  taken place, the deeming provision cannot be brought into  play in the absence of it being specifically stated that the  process amounts to manufacture.  

       We have heard learned counsel for the parties at length.   We have also carefully perused the pleadings and examined a  series of cases decided by this Court.  The following  conclusions are irresistible:  1)      The process carried out by the appellants do not change  the basic identity or original character of M.S. Welded  Pipes to make it a new marketable product leading to  manufacture as defined under Section 2(f) of the Central  Excise Act, 1944.   2)      The burden to prove manufacture is always on the  Revenue.  In the instance case the Revenue has  completely failed to prove that the activity carried out by  the appellant amounts to manufacturing.  It is settled  law that when one particular item is covered by one  specified entry, then the Revenue is not permitted to  travel to residuary entry.   3)      The residuary entry is meant only for those categories of  goods which clearly fall outside the ambit of specified  entries.  Unless the Department can establish that the  goods in question can by no conceivable process of  welding be brought under any of the tariff items, resort  cannot be had to the residuary item.

       In view of the settled legal position the activity of the  appellants of merely joining of three pipes, one with other, of  different dimensions to obtain a desired length can by no  stretch of imagination be brought within the category of  ’manufacture’.                    Consequently, these appeals are allowed and show cause  notices are quashed and the impugned judgment of the  Tribunal and Commissioner of Central Excise are set aside. In  the facts and circumstances of the case, we direct the parties  to bear their own costs.

       Before we part with this case we would like to impress  upon the respondent authorities that before issuance of show  cause notices the Revenue must carefully take into  consideration the settled law which has been crystallized by a  series of judgments of this Court.  The Revenue must make  serious endeavour to ensure that all those who ought to pay  excise duty must pay but in the process the Revenue must  refrain from sending of indiscriminate show cause notices  without proper application of mind.   This is absolutely  imperative to curb unnecessary and avoidable litigation in  Courts leading to unnecessary harassment and waste of time  of all concerns including Tribunals and Courts.