Case Details: Quippo Energy Ltd. vs. Commissioner of Central Excise, Ahmedabad-II (2025) 34 Centax 364 (S.C.)
Judiciary and Counsel Details
- J.B. Pardiwala & K.V. Viswanathan, JJ.
- S/Shri Charanya Lakshimikumaran, Ms Nitum Jain, Ayush Agarwal, Ms. Neha Choudhary, Swastik Mishra, Ms. Medah Sinha, Advs. and R. Parthasarathy, AOR, for the Appellant
- Shri Gurmeet Singh Makker, AOR, for the Respondent
Facts of the Case
The appellant, after importing Gensets falling under Tariff Item 8502 20 90 of the Customs Tariff Act, 1975, placed the Gensets in a steel container and fitted the container with additional, integral components, resulting in containerized Gensets/Power Packs. The appellant submitted that the genset at the time of import was in a form suitable for and intended for permanent installation and contended that the additional components merely facilitated portability without altering the essential character of the imported genset. It was further contended that these additional components were not transformative but only accessories, and therefore, the resulting containerized Gensets/Power Packs should not be treated as a new, distinct, and marketable commodity. The legal issue arising was whether the process undertaken by the appellant constitutes ‘manufacture’ under Section 2(f)(i) of the Central Excise Act, 1944 and whether excise duty is payable. The matter was accordingly placed before the Supreme Court.
Supreme Court Held
The Hon’ble Supreme Court held that the process of placing a Genset within a steel container and fitting it with additional, integral components brings into existence a new, distinct, and marketable commodity and thus amounts to ‘manufacture’ under Section 2(f)(i) ofthe Central Excise Act, 1944. The Court observed that the additional components should be considered as ‘parts’ of Power Pack since, without them, the Power Pack would not produce electricity within the steel container and thereby be able to fulfil its primary function, and thus were not mere ‘accessories’. The process undertaken imparts core functional utility of portability to Genset, a utility that was non-existent at the time of import, satisfying the test of transformation. Consequently, the containerized Gensets/Power Packs are marketable and excise duty is payable on the goods manufactured.
List of Cases Cited
- Commissioner v. Insulation Electrical Pvt. Ltd. — 2008 (224) E.L.T. 512 (S.C.) — Noted [Para 45]
- Commissioner v. S.R. Tissues Pvt. Ltd. — 2005 (186) E.L.T. 385 (S.C.) — Noted [Paras 37, 40, 41, 47]
- Maruti Suzuki India Ltd. v. Commissioner — 2015 (318) E.L.T. 353 (S.C.) — Noted [Paras 39, 40]
- Saraswati Sugar Mills v. Commissioner — 2011 (270) E.L.T. 465 (S.C.) — Relied on [Para 45]
- Satnam Overseas Ltd. v. Commissioner — 2015 (318) E.L.T. 538 (S.C.) — Noted [Paras 38, 40, 41]
- Servo-Med Industries Pvt. Ltd. v. Commissioner — 2015 (319) E.L.T. 578 (S.C.) — Noted [Paras 17, 19, 28, 29, 30, 31, 32, 33, 34, 36, 40]
- Steel Authority of India Ltd. v. Commissioner — 2022 (382) E.L.T. 10 (S.C.) — Relied on [Para 45]
- Union of India v. Delhi Cloth and General Mills Co. Ltd. — 1977 (1) E.L.T. (J 199) (S.C.) — Relied on [Paras 24, 25]
- Union of India v. J.G. Glass Industries Ltd. — 1998 (97) E.L.T. 5 (S.C.) — Noted [Paras 26, 27, 29, 30, 31]
