Case Details

  • Case Name: Alupro Building Systems Pvt. Ltd. v. Commissioner of Central Excise Bangalore‑II
  • Court: Supreme Court of India, Civil Appellate Jurisdiction
  • Civil Appeal No.: 8030 of 2010
  • Date of Judgment: 27 May 2026
  • Period of Disputed Activity: April 2002 to December 2003 (cutting, routing and grooving of aluminium composite panels – ACPs)

Parties Involved

  • Appellant: M/S Alupro Building Systems Pvt. Ltd, a construction contractor engaged in fixing aluminium composite panels on building façades.
  • Respondent: Commissioner of Central Excise Bangalore‑II (Revenue).
  • Other Parties Mentioned: Additional Commissioner of Central Excise, Commissioner (Appeals), Customs, Excise and Service Tax Appellate Tribunal (CESTAT), High Court of Karnataka, various counsel (Ms. Charanya Lakshmikumaran for the appellant; Mr. N. Venkataraman, Mr. G.S. Makker for the respondent).

Issues / Allegations / Violations

1. Whether the process of cutting, routing (grooving) and assembling ACPs constitutes “manufacture” under Section 2(f) of the Central Excise Act, 1944.

2. Whether the High Court had jurisdiction under Section 35G to entertain the appeal concerning the excisability of the ACPs.

3. Whether the Revenue discharged its statutory burden to prove that the processed ACPs are marketable as a distinct commercial product.

4. Interpretation of the amendment inserted by Finance (No. 2) Act 2014 – Section 35L(2) – and its retrospective/clarificatory effect on appellate jurisdiction.

Findings & Observations

  • The Court held that the appellant’s activities merely adapt the size and shape of the imported ACPs; they do not create a new product with a distinct name, character or use.
  • Cutting, grooving and installing the panels are classified as preparation/installation, not manufacturing, because the essential character of the ACP remains unchanged.
  • The Revenue failed to produce any evidence of marketability (trade parlance, commercial recognition) of the cut‑and‑grooved panels; the burden of proof on marketability lies squarely on the Revenue.
  • The question of excisability is directly linked to the “rate of duty” and, under the combined reading of Sections 35G and 35L, is appealable only to the Supreme Court, not the High Court.
  • Section 35L(2) is a clarificatory amendment; it does not create new rights or liabilities and operates retrospectively, merely giving statutory expression to the pre‑existing principle that excisability falls within the “rate of duty” category.

Penalties / Settlements / Directions

  • No excise duty, interest or penalty is payable by Alupro Building Systems.
  • The order of the Additional Commissioner (appeals) dated 21 June 2005, which upheld the liability of excise duty on the basis of manufacture, is restored.
  • The High Court judgment (which had set aside the Additional Commissioner’s order) is set aside.
  • No monetary settlement or further penalty is imposed.

Corrective Actions & Future Obligations

  • The Revenue must, in future excise disputes, provide concrete evidence of marketability of the goods in question; mere process description is insufficient.
  • Appeals concerning the excisability of goods must be filed directly before the Supreme Court under Section 35L(1)(b), bypassing the High Court.

Final Ruling & Enforcement

  • The Supreme Court allowed the appeal of Alupro Building Systems, set aside the impugned High Court judgment, and restored the Additional Commissioner’s order.
  • The matter is disposed of; any pending applications related to this dispute stand disposed.
  • The decision clarifies the appellate route for excisability issues and re‑affirms that superficial size‑adjustment processes do not amount to “manufacture” for excise purposes.