The process of drilling, trimming and chamfering of brake lining blanks is a process essential, incidental or ancillary to the completion of the brake linings as a manufactured product.

NAINAR SUNDARAM, J.

This writ appeal is directed against the order of Padhmanabhah J. in W.P. 3700 of 1977. The petitioners in that writ petition are the appellants; and the respondents therein are the respondents herein. It will be convenient for us if we choose to refer to the parties as per their array in the writ petition. The petitioners are the manufacturers of brake equipments, apart from other motor vehicle parts. We are more concerned with the brake linings over which a controversy has arisen as to whether it will attract the provisions of the Central Excises and Salt Act 1944 (Act 1 of 1944), hereinafter referred to as the Act. The point involved is certainly argumentative but at the same time it requires a decision only with reference to the interpretation to be put on the expression 'manufacture' as defined in S. 2 (f) of the Act. Certain facts need delineation. The petitioners purchase brake lining blanks from Messrs. Rane Brake Linings Ltd., Madras and other brake lining manufacturers. An exception was taken, in the course of the arguments, on behalf of the petitioners, to the learned single Judge calling the items purchased by the petitioners as 'brake lining blanks' and it was contended before us that what the petitioners purchase is only brake lining as such, after the process of its manufacture is completed. In our view, this contention appears to be a puerile and a feighed one to get over the implications, factual and legal, of what the petitioners themselves expressed before the Authorities with regard to the nature of the articles purchased by them from Messrs. Rane Brake Linings Ltd., and other brake lining manufacturers and subsequently marketed by them after putting the articles to specified processes. According to the petitioner, the brake linings which they purchase from the aforesaid concerns have to go through the processes of drilling, trimming and chamferring for the purpose of making them to suit the requirements of the users of the various vehicles and they are put in a carton and sold under the caption 'B.I. Girling Kit Linings' and nothing more happens and hence such processes can never come within the ambit of 'manufacture' as defined by S.2(f) of the Act. The view of the respondents on this question is different. According to them, the articles purchased from Messrs. Rane Brake Linings Ltd., Madras, and other brake lining manufacturers by the petitioners though after payment of excise duty at 20 per cent are subjected to the further processes of drilling, trimming and chamferring to suit the needs of the concerned customers depending upon the vehicles, for which brake linings are required and then only marketed by the petitioners and the said process will certainly fall within the ambit of S.2(f) of the Act, and what is demanded is only the difference in duty between what is leviable on the products as they are marketed by the petitioners and the duty already collected at the time of clearance of the articles from Messrs. Rane Brake Linings Ltd., Madras and other brake lining manufacturers.

2.The second respondent by his order dated 14-2-1977 directed that the petitioners should immediately take out a licence under Rule 174 of the Central Excise Rules 1944, read with S.6 of the Act, and the second respondent further ordered under Rule 9(2) of the Central Excise Rules, 1944, that the petitioners should pay the appropriate duty on the past clearance of brake linings effected from their factory taking into account duty, if any, that was paid on the goods previously by M/s. Rane Brake Linings Ltd., Madras. The second respondent also imposed a penalty of Rs. 200 under Rule 173-Q of the Central Excise Rules, 1944. The petitioner, aggrieved by this order of the second respondent, preferred an appeal to the third respondent. The third respondent, by order dated 19-7-1977, did not opine differently, with regard to the petitioner's obligations to possess a licence for manufacture of brake li