The Hindu Business Line : Where the ribbon got stuck in the old typewriter

WE HAVE long forgotten the old and faithful typewriters that had rollers to chug along and inked ribbons to give form to thoughts. To evoke your nostalgic memories, however, is the Kores India Ltd case that the apex court decided recently.

The dispute was very simple: Kores claimed that there was no `manufacture' when it cut jumbo rolls of ribbon into smaller standard sizes, but the Excise officials had a different view.

While the jumbos, procured from small-scale units, duly suffering excise duty, were 210 metres or more in length, the final product was of 10 and 5 metres, after Kores fed the big roll into cutting and spooling machines. The company argued that duty had been paid on the rolls, so there was no question of paying again.

At the Tribunal stage, the ruling went against Kores; cutting of ribbons in smaller size and spooling them amounted to manufacture, said the Tribunal, and, therefore, duty was payable on these ribbons.

Conversion of ribbons to spools was as per requirement of consumers to suit different brands of typewriters, reasoned the Tribunal, and added that the product became saleable commodity only after getting spooled in desired sizes.

At the apex court the company's advocate Mr V. Lakshmikumaran submitted that there was no manufacturing process. Cutting jumbo rolls into smaller size may amount to processing, he said, "but by no stretch of imagination" it amounted to manufacturing. He cited the Aman Marble Industries case where the Supreme Court had held that cutting of the blocks of marble into slabs did not amount to manufacturing.

"There is no reason to adopt a different yardstick so far as cutting of typewriter rolls of ribbons into smaller sizes is concerned," said Mr Laksmikumaran.

In response, Mr Mohan Parasaran, arguing for the Revenue, said that a different commercial commodity came into existence, "and the commodity which was already in existence serves no purpose and no commercial use after the process." Also, that Kores had deliberately avoided paying duty, mala fide.

The court looked at the definition of `manufacture' in Black's Law Dictionary: "The production of articles for use from raw or prepared materials by giving such materials new forms, qualities, properties or combinations, whether by hand labour or machine". By manufacture something is produced and brought into existence, which is different from that out of which it is made, said the court.

Reference was also made to popular precedents on the subject, such as: the decision in the Rajasthan State Chemical Works case that there is manufacture when any particular process is so integrally connected with the ultimate production of goods, that, but for that process, processing of goods would be impossible or commercially inexpedient.

In the Saraswati Sugar Mills case the ruling was that the essence of manufacture is the change of one object to another for the purpose of making it marketable.

And wisdom from the Ujagar Prints case is that insistence on any sharp or intrinsic distinction between `processing and manufacture', results in an oversimplification of both and tends to blur their interdependence.

An insight from the Empire Industries precedent cited by the apex court in the current case related to transformation of a matter into something else.

Applying all this guidance to the Kores case, Justices Mr Arijit Pasayat and Mr C. K. Thakker held that the product resulting from jumbo rolls was "a distinct, identifiable article having distinct name, function and use." Jumbos and spools are "completely different" and "not inter-changeable".

An out-of-the-ordinary remark was that the ribbon in jumbo rolls cannot be used in a typewriter; "similarly a person who requires 30 pieces of spool ribbon will not be satisfied if he is offered jumbo rolls of equal length."

To explain how the big rolls lost their identity, the judgment hypothesised: "Even if the smaller-sized ribbons are stitched together or fixed together in any manner, there is no possibility of its use as jumbo rolls."

To cut a long ribbon story short, the decision went against Kores.

"The biggest obstacle to professional writing is the necessity for changing a typewriter ribbon," is a quote of Robert Benchley, who, I guess, might have been happier if someone had sold him a jumbo roll.

Tailpiece

"If they at last find an anti-ageing pill, there'll be only one thing definite."

"Taxes?"

Detaxification@TheHindu.co.in

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