Alupro Building Systems Pvt. Ltd. vs Commissioner of Central Excise, Bangalore-II 2026 INSC 582 - Central Excise Act

Central Excise Act, 1944 — Ss. 35G(1), 35L(1) - The meaning and application of “manufacture”, is as follows:- i. An appeal from an order passed by the Appellate Tribunal relating to the determination of any question having a relation to the rate of excise duty or to the value of goods for the purpose of assessment lies before this Court and not before the High Court. However, such exclusion is not attracted by every question touching the rate of duty or the value of goods. The question must have a direct and proximate relationship with assessment. ii. The question of excisability of goods is connected with the rate of duty for the purpose of assessment. A decision on excisability of goods would be a precursor to the determination of any question having a relation to the rate of duty or to the value of goods. iii. Sub-section (2) of Section 35L of the Act, 1944, merely gives statutory expression to the collective reading of Sections 35G and 35L, respectively. It clarified that excisability always fell within the expression “rate of duty”. Thus, when an amendment intends to clarify something which is implicit in the operation of a provision, such an amendment operates retrospectively. iv. The process of making superficial changes in order to facilitate the use of goods, which do not alter the fundamental properties of the goods, does not create a distinct product so as to pass the transformation test. To levy excise duty, marketability of the manufactured goods has to be proved. Manufactured goods are said to be marketable when they are capable of being bought or sold, or known as a commercial product in the market. v. The burden of establishing marketability of the manufactured goods lies on the Revenue, and it must be discharged by demonstrating “marketability” as defined in the foregoing paragraphs of this judgment. In this regard, the standard of proof while discharging the burden must be met keeping in mind the goods in question. (Para 97)