I.J. Rao, Member (T)

1. None was present for the respondents but they submitted written arguments for consideration. We, therefore, heard Shri V.M. Doiphode, the learned SDR and perused the written submissions made by the respondents.

2. The facts in brief, as stated by the appellant Collector are as follows: -

"M/s. Lakaki Works (P) Ltd., Lonavala, Pune (hereinafter referred to as 'Respondent' are manufacturers of excisable goods viz. Auto Thinner Thinner for C.R. Paints, falling under erstwhile TI-68. The respondent were repacking the duty paid Mineral Turpentine and Xylol respectively, in small containers as required by the customers marketing them with their 'Lakaki' brand name as 'Auto Thinner' Thinner for C.R. Paints as above described filed classification list from 15.12.84 claimed the said goods as non excisable. After following the adjudication proceedings the A.C. C.Ex. Pune-l Division has classified the goods under TI-68. The Respondent prefer an appeal with the Collector (Appeals) Bombay and the Collector (Appeals) held that the Respondents had merely repacked sold the goods accordingly allowed the appeal set aside the Order-in-Original passed by the A.C.C.Ex. Pune-l Division."

3. Shri Doiphode, the learned SDR submitted that what the appellants sold may be the same goods, namely, duty paid mineral turpentine and xylol repacked in small containers and given different names. But as they have been given a new name, packed in smaller containers and were sold as different commodities, namely, thinner, they are different goods and are liable to pay excise duty. In support of his arguments he cited a judgment of the Madras High Court 1986 (26) E.L.T. 211 (Madras) Brakes India Ltd. v. Superintendent of Central Excise, Madras and Anr. judgment of the Supreme Court reported in 1987 (32) E.L.T. 231 (SC) Regional Director Employees State Insurance Corporation v. Ram Chander. He submitted that the processes undertaken by the respondents are incidental or ancillary to manufacture.

4. The respondents in their written arguments submitted that they re-packed and renamed the goods. They pleaded that Section 2(f) of the C.E. S. Act is an inclusive definition. They argued that branding, repacking or re-labelling does not amount to manufacture and cited in their support MANU/SC/0417/1976 : AIR 1977 (SC) 879 - Stare of Maharashtra v. C.P. Manganese Ore. They also cited two more judgments, (i) MANU/AP/0075/1982 : 1984 (15) ELT 32 - Brooke Bond India Ltd. v. Union of India; and (ii) 1978 ELT (J 18) Madras E.I.D. Parry Ltd. v. Union of India in support of their arguments.

5. We have considered the arguments of both sides. The basic fact that there is no change in the product obtained by the respondents and sold by them, in so far as its, identity and nature is concerned is not in dispute. Whether re-packing, relabelling and renaming amounts to manufacture of a different commodity is the question. The two Judgments cited by the learned DR do not help the appellants. In Brakes India Ltd. (supra) the High Court held that the process of drilling and chamfering is a process incidental or ancillary to the completion of brake lining and amounts of manufacture. In this appeal there is no claim that the mineral turpentine and xylol are physically or chemically changed in any way. Therefore, the ratio of the judgement is not applicable. In the other judgment (supra) it was held that stitching is manufacture. There the fabric which is stitched undergoes a change in its shape, character, use and name. Such is not the case here. Therefore, the ratio of this judgment is not applicable to this appeal.

6. We have also considered the ratio of the judgment cited by the respondents. In the Brooke Bond India Ltd. (supra) the High Court observed that the essence of the expression "manufacture" "is the changing of one object into another for the purpose of making it marketable". On this principle the High Court held that coffee chicory mixture