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

The question that falls for consideration in this writ petition is whether the Brakes India Ltd., the petitioner herein, are bound to take out a licence under the Central Excises and Salt Act, 1944, for marketing brake linings under the name of B.I. Girling Kit Linings and whether they are bound to pay central excise duty on the said brake linings.

2.The petitioners are the manufacturers of brake equipment for automotive and non-automotive units comprising master cylinder, wheel cylinder, brake washers, brake hoses etc. inclusive of foundation brakes. They supply brake assemblies to vehicle manufacturers, viz., Ashok Leyland, Premier Automobiles' Telco, Hindustan Motors, Heavy Vehicles factory belonging to the Defence Establishment of the Government of India etc. for fitment as original equipment. For these purposes, they obtain blank brake linings which form part of the components of the brake assembly under Chapter X procedure of the Central Excises and Salt Act from the manufacturers of brake linings without payment of central excise duty. So far as this is concerned, there is no dispute in this writ petition.

3.Apart from the above, the petitioners obtain brake linings blanks from Messrs Rane Brakes Linings, Madras and other brake lining manufacturers made to their specifications. These brake lining blanks are removed from the factory of Messrs Rane Brake Linings, Madras only after payment of central excise duty. The petitioners then drill, trim and chamfer such duty paid brake lining blanks to suit the requirements of the users of the various vehicles. These are then put in a carton and sold under the caption B.I. Girling kit linings.

4.According to the respondents the petitioners must be deemed to be manufacturing brake linings and consequently they are bound to takeout L-4 licence for the manufacture of such brake linings and also pay excise duty on the said brake linings. On the other hand, the contention of the petitioners is that the brake linings are not manufactured by them but by Messrs Rane Brake linings, Madras and other manufacturers of brake linings. Such brake linings are purchased by the petitioners from the manufacturers after payment of excise duty at 20 per centad valoremThereafter, the brake linings are subjected to a process of drilling holes and trimming and chamferring to suit the needs of different customers depending upon the vehicles for which such brake linings are bought. Such drilling and trimming and chamferring do not constitute 'manufacture'. Consequently, it cannot be said that the petitioners are manufacturing brake linings. Therefore, the petitioners are neither bound to take out a licence nor are they bound to pay excise duty on the brake linings sold by them.

5.It is admitted that what is purchased by the petitioners from Messrs Rane Brake Linings, Madras and other manufacturers of brake linings is brake lining blanks. It is also admitted that such brake lining blanks cannot be used by owners of motor vehicles without drilling holes and trimming or chamferring them. It is therefore, clear that what is manufactured and supplied by Messrs Rane Brake Linings, Madras and other manufacturers of brake linings to the specific order of the petitioners are incomplete brake linings or what are called brake lining blanks. The process of completion of manufacture of brake linings which could be readily used by owners of the vehicles takes place only at the hands of the petitioners by the process of drilling and trimming or chamferring the same.

6.The learned counsel for the petitioners contended that the process of manufacture of brake linings was completed even before they left the factories of Messrs Rane Brake Linings, Madras and other manufacturers of brake linings. The process of drilling and trimming of chamferring the brake lining blanks cannot constitute a process in the manufacture of brake linings. The petitioners' learned counsel argued that manufacture involved a complete transfor