IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL   APPEAL NOS. 3889-3891 OF 2003    

Union of India & Ors. — Appellants

VERSUS

M/s Alembic Glass Industries Ltd. &  Anr.  

—    Respondents

O R D E R

These  appeals,  by  special  leave,  are  directed  against  the  

final judgment and order dated 23rd January 2002 delivered by  

the  High  Court  of  Gujarat  at  Ahmedabad  in  Special  Civil  

Application No.2528 of  1984.   By the impugned judgment,  the  

High court  has quashed orders  dated 11th May,  1984 and 14th  

May,  1984  whereby  the  Assistant  Collector  had  cancelled  the  

approved price list and the revised ground plan respectively as  

also  the  consequential  show  cause  notices  issued  to  the  

respondent – assessee.  While deciding the appeals in favour of  

the assessee, the High Court has placed reliance on the decision

of  this  Court  in  Union  of  India  and  others Vs.  J.G.  Glass  

Industries Ltd. and others1.   

The  assessee  carries  on  the  business  of  manufacturing  

glassware as also the process of colour printing and decoration of  

the glassware so manufactured.  It appears that based on trade  

notice No.MP/24/80 dated 8th February 1980, which in turn was  

based  on  tariff  advice  No.2/80  dated  4th January  1980,  the  

assessee pleaded that the activity of printing  and  decorating  

glassware, already manufactured, in a separate factory did not  

amount to “manufacture” and, therefore, the value in relation to  

the said process would not be includible for the purpose of levy of  

Excise duty.  It was argued  that unless the said process  brings  

into existence  a different  commercial product, it cannot be said  

to  be  a  manufacturing process.   It  was also asserted that  the  

printing unit was separate  from the main unit manufacturing  

the  glassware.   A  revised  ground  plan  was  placed  before  the  

competent authority on 18th May, 1983.     On 1st June, 1983, the  

assessee also obtained a separate licence under the Factories Act,  

1948 for the decorating unit.  On 2nd June 1983,                      the  

revised  ground  plan  was  approved  by  the  competent  1 (1998) 2 SCC 32

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authority  and  on  7th July,  1983,  the  fresh  price  list  was  

provisionally  approved  with  effect  from  3rd June,  1983.   The  

competent authority,  after conducting enquiry finally approved  

the fresh price list on 7th October, 1983.

On 11th May, 1984, the same authority who had approved  

the price list and the revised ground plan cancelled the approval  

of the price list.   On 14th May, 1984, the approval of the revised  

ground plan was also cancelled.  

Being  aggrieved,  the  assessee  challenged  the  said  two  

orders before the High Court by way of a writ petition.  As stated  

above,  the High Court,  following  the decision  of  this  Court  in  

J.G. Glass Industries Ltd. and others (supra) has allowed  the  

petition and set aside both the said orders.  Aggrieved thereby,  

the revenue is before us in these appeals.  

We have heard  learned counsel for the parties.

Mr.  Bhatt,  learned senior  counsel  appearing on behalf  of  

the revenue,  has submitted that  since in the present case the  

assessee had taken the matter directly to the High Court by way  

of  a  writ  petition,  the  High  Court  accepted  the  stand  of  the  

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assessee that the activity of decoration etc. was being carried out  

in a separate premises without any verification of the stand of  

the assessee.  Learned counsel thus, contends that the ratio of  

the  decision  of  this  Court  in  J.G.  Glass  Industries  Ltd.  and  

others (supra) is not applicable on the facts of the present case.   

We are unable to persuade ourselves to agree with learned  

counsel for the revenue.   

In order to decide  whether  or not a process amounts to  

“manufacture” within the meaning of Section 2 (f) of the Central  

Excise  And Salt  Act,  1944 (as  it  then existed),  in   J.G.  Glass  

Industries Ltd. and others (supra), this Court laid down a two-

fold  test,  viz.,  (1)  whether  by   the  said  process  a  different  

commercial commodity comes into existence or the identity of the  

original  commodity  ceases  to  exist;   and  (2)  whether  the  

commodity which was already in existence will serve no purpose  

but for the said process.  In other words, whether the commodity  

already in existence will be of no commercial use but for the said  

process.  Applying the said two-fold test, the Court held that the  

plain bottles were themselves commercial commodities and could  

be sold and used as such.  By the process of printing names or  

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logos on the bottles, the basic character of the commodity does  

not change. They continue to be bottles and, therefore, it cannot  

be said that but for the process of printing, the bottles will serve  

no purpose or are of no commercial use.  However, while holding  

so,  the  Court  drew  a  distinction  between  a  case  where  the  

printing on the bottles was also carried out in the same factory  

where  the  bottles  were  manufactured  and  a  case  where  the  

printing on the bottles was being carried out in a separate unit.  

The Court finally held that if the printing and decoration etc. on  

such bottles was carried out in a premises different from that in  

which the bottles were manufactured, the value of the printing  

will not be includible while determining the assessable value of  

the excisable goods for computing the excise duty.   

In the present case, it is clear from the impugned judgment  

that for accepting the stand of the assessee that it had a separate  

unit  for  carrying  out  the  process  of  decoration  etc.  on  the  

glassware, the High Court has taken note of the fact that the four  

show cause notices issued after 21st May, 1984, pertained to the  

period  during  which  the  goods  were  cleared  by  the  assessee  

under  the  price  list  finally  approved  on  7th October  1983,  in  

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respect of  a sesparate unit for which revised ground plan was  

submitted  and  approved.  This  fact  was  not  disputed  by  the  

revenue before the High Court.  In that view of the matter, no  

fault can be found with the decision of the High Court, holding  

that the issue stood concluded by the aforementioned decision of  

this Court.   

Therefore,  the  appeals,  being  devoid  of  any  merit,  are  

dismissed leaving the parties to bear their own costs.  

........................................J. [D.K. JAIN]

........................................J. [P. SATHASIVAM]

........................................J. [AFTAB ALAM]

NEW DELHI; MAY 06, 2010.

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