LegalAware
LegalAware.ai
EMPOWERING LEGAL AWARENESS

Commissioner of Central Excise, Hyderabad-IV v. M/s Xerox India Ltd. and Others

Civil Appeal · 2026 INSC 805Decided 5 Aug 2026
Civil Appeal Nos. 5939-5941 of 2010, with Civil Appeal Nos. 11870-11872 of 2018
Justice S.V.N. Bhatti · Justice N.V. Anjaria

Background

Xerox India imported photocopier machines in disassembled (CKD/SKD) form and, at its warehouses in Hyderabad and Rampur, grouped and packaged the components into complete sets according to each customer's order before dispatch: an activity Xerox called "kitting." The Revenue treated this as "manufacture" under Section 2(f) of the Central Excise Act (since a new machine, in Revenue's view, effectively came into existence in the warehouse) and raised large excise duty demands, also alleging Xerox and two of its executives had misrepresented the activity to evade duty. CESTAT had ruled that no manufacturing activity occurred in the warehouse and set aside the demand.

Decision Breakdown

The Supreme Court upheld the Tribunal's findings, holding that "manufacture" requires a genuine transformation producing a new, distinct, marketable article: mere assembly, packaging or fitting together of parts does not qualify unless it converts something incomplete into something complete. Here, the imported goods had already been classified, assessed and cleared through customs as complete machines under the relevant tariff heading; the Tribunal found no physical assembly took place at the warehouse (key parts like the document feeder were already factory-fitted abroad), and the Revenue could not point to any evidence, including no employee statement, that assembly occurred there. The Court also faulted the Revenue for building its case without ever physically inspecting the premises, when modern evidence like photographs could easily have proved or disproved a manufacturing process.

Lesson Learnt

Excise duty can only be levied where a genuinely new, distinct commercial product actually comes into being: merely repackaging or grouping already-complete imported components to a customer's specification is not "manufacture," and a tax authority must prove its factual case with real evidence rather than assumptions.

Official source (sci.gov.in)View Judgment (PDF)

More rulings in Tax & Customs Law

Tax & Customs LawSupreme Court of India

Mepco Industries Ltd. v. Commissioner of Income Tax, Madurai

The Supreme Court dismissed the appeal and upheld treatment of this subsidy as a taxable revenue receipt. It applied the purpose test: the scheme had to be read as a whole to determine whether the assistance supported capital investment or the running of an established business. Here, payment tracked actual electricity charges incurred in production and was not earmarked for plant, machinery, factory construction or repayment of capital borrowing. The scheme's broad aim of industrial development did not override those operative features, and payment after production began was relevant to the overall scheme rather than decisive by itself.

Decided 7 Oct 2026Read case
Tax & Customs LawDelhi High Court

M/S Kuku Overseas vs. Commissioner of Customs & Anr.

The Court found the petitioner's non-disclosure of the earlier adjudication order was material, since the core premise of the petition (indefinite non-finalisation) no longer held true once formal orders existed. It held the petitioner now had an effective alternate remedy, a statutory appeal under Section 128(1) of the Customs Act, to raise all its arguments, including about delay, and declined to keep the writ petition pending just because a related Supreme Court case on delay in adjudication was ongoing. The writ petition was dismissed as not maintainable in its present form, with liberty to appeal.

Decided 6 Oct 2026Read case
Tax & Customs LawDelhi High Court

M/s Aparna Collection vs. Union of India & Ors. and connected matters

The Court rejected the argument that limitation under Section 74(2) must be measured from the date on Form GST DRC-01, because DRC-01 is only a summary of the show cause notice. On Section 74(10), the Court held that the statute requires the order, not the DRC-07, to be issued within the prescribed period, and that DRC-07 is a summary uploaded later under Rule 142. Because the petitioner had a statutory alternative remedy of appeal under Section 107, and the questions raised needed factual findings, the Court declined to decide the merits in writ jurisdiction. The petitions were disposed of, with liberty to appeal under Section 107 and to raise all contentions there, including limitation and exclusion of the time spent in these proceedings.

Decided 5 Oct 2026Read case
Tax & Customs LawSupreme Court of India

Additional Commissioner, Commercial Tax & Others v. Cadila Health Care Ltd. & Another

The Supreme Court dismissed the authorities' appeals and upheld the classification accepted by the High Court. It held that, under the statutory entries at issue, classification depended on the goods' form when sold, rather than what customers might later prepare with them. The beverage entry grouped beverages with syrups, cordials, juices and other liquid preparations, and did not expressly include powders used to make drinks. Packaging instructions and general tests of popular meaning or function could not expand that clear statutory description. Because the products did not fit the specific beverage entry, they belonged in the residual category; precedents involving differently worded entries or liquid products did not change that result.

Decided 5 Oct 2026Read case
Tax & Customs LawDelhi High Court

Zoom Insurance Brokers Pvt. Ltd. vs. Assistant Commissioner of Income Tax, Circle 25(1) & Anr.

The Court dismissed the writ petition. Except for the assessment year, the facts were identical to the earlier case, and the Court held that judicial discipline required it to follow the Coordinate Bench's decision in the petitioner's own case. The Court did not accept the petitioner's reliance on an interim order in another company's case, and noted that the earlier judgment in the petitioner's own case was final. The earlier judgment also left it to the Assessing Officer to examine, after the notice is answered, whether the Rs 82 lakh amount is a spurious transaction.

Decided 1 Oct 2026Read case
Tax & Customs LawDelhi High Court

Ms Devi Electronics Pvt. Ltd. vs. Commissioner CGST Delhi South & Ors.

The High Court dismissed the petition. It held that the Commissioner could validly invoke Section 54(11), because an anti-evasion investigation was already underway when the impugned order was passed and the Commissioner had formed an opinion of fraud or malfeasance based on contemporaneous material. The Court held that the power to withhold refund is distinct from the adjudication and appellate scheme under Sections 73, 74 and 107, and that the absence of a statutory appeal does not bar judicial review. However, an appeal had already been filed before the GST Appellate Tribunal (GSTAT), so the Court declined to decide disputed factual questions and left all issues open before the GSTAT.

Decided 1 Oct 2026Read case