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Legal Case Shots

Court judgements broken down into the case type, how the decision played out, and the lesson worth remembering, with the full judgement available as a PDF.

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Legal Case Shots is a searchable database of Supreme Court of India judgments, each broken down into the case type, the court's key holding, and a practical lesson learnt, with the full judgment available as a PDF for citation or deeper reading.

Tax & Customs LawSupreme Court of India

M/S. Quippo Energy Ltd. vs. Commissioner of Central Excise, Ahmedabad-II

Not available · 2025 INSC 1130Decided 19 Sept 2025
Not available
Justice J.B. Pardiwala · Justice K.V. Viswanathan

Background

Quippo Energy imported gas generating sets ("Gensets") and leased them out to customers as portable "Power Packs." To make the Gensets portable and functional for leasing, the company placed each imported Genset inside a steel container and fitted it with locally sourced components (radiator, ventilation fan, oil tank, pumps, silencer, wiring, etc.). Excise authorities held that this process amounted to "manufacture" of a new product (the "Power Pack"), attracting Central Excise duty, which Quippo disputed, arguing the Genset's essential character and use (generating electricity) never changed.

Decision Breakdown

The Supreme Court reaffirmed the two-fold legal test for "manufacture": (1) the Transformation Test, whether a new commercial product with a distinct name, character, or use emerges; and (2) the Marketability Test, whether that new product is commercially saleable as such. Applying this, the Court held that the containerized "Power Pack" was structurally and functionally distinct from the bare imported Genset. It gained the crucial new attribute of portability, and the added components were "parts" (not mere accessories) essential for its function inside the container. Since the Power Pack was also clearly marketable (it was what customers actually leased), both limbs of the test were satisfied, and the process amounted to "manufacture" liable to excise duty. The appeals were dismissed.

Lesson Learnt

For tax purposes, a product is treated as newly "manufactured", and thus taxable, not just when its basic function changes, but also when a process gives it a genuinely new, distinct commercial identity (such as portability), even if the core end-use remains conceptually similar.

M/S. Quippo Energy Ltd. vs. Commissioner of Central Excise, Ahmedabad-II – Legal Case Shots | LegalAware