Civil Appeal No 468 of 1988
From the Order dated 771987 of the Customs Excise and Gold Control Appellate Tribunal New Delhi in Appeal No 38383 D G Ramaswami Additional Solicitor General Ms Indu Malhotra and Mrs Sushma Suri for the Appellant
The Judgment of the Court was delivered by SABYASACHI MUKHARJI J
This is an appeal under Section 35Lb of the Central Excise and Salt Act 1944 hereinafter called the Act 
The appeal is directed against the Order of the Customs Excise and Gold Control Appellate Tribunal hereinafter called the CEGAT 
The respondent herein filed a classification list on 16th March 1982 seeking approval of Sawn timber and dried timber as non excisable
The submission of the respondent was that timber logs were only sawn into sizes and these did not tantamount to any manufacture
However the Assistant Collector Madras held that the conversion of timber logs into sawn timber satisfied the conditions of manufacture insofar as the conversion of timber logs into sawn timber involves transformation whereby a new and different article with the distinct name character or use emerges which is different from timber logs
It was held accordingly that excise duty  8 ad valorem under Tariff Item 68 of the erstwhile Central Excise Tariff was leviable
The respondent filed an appeal before the Collector of Appeals who concurred with the Assistant Collector upholding the duty
Aggrieved thereby the respondent filed an appeal before the CEGAT
365 The Tribunal in the Judgment under appeal relied on its decision in the case of Sanghvi Enterprises Jammu Tawi vs Collector of Central Excise Chandigarh 1984 Vol
and the Karnataka High Court in the case of Y Moideen Kunhi  Ors
vs Collector of Central Excise Bangalore  Ors 1986 Vol
and came to the conclusion that no new product emerges by sawing of timber into several sizes
In the premises the Tribunal allowed the appeal of the respondent
Hence this appeal
It is well settled that excise duty becomes chargeable only when a new and different article emerges having a distinct name character and use
See in this connection the observations of this Court in Union of India vs Delhi Cloth  General Mills  and South Bihar Sugar Mills Ltd etc
vs Union of India Ors
1968 3 SCR 21
This principle is well settled
This is a question of fact depending upon the relevant material whether as a result of activity a new and different article emerges having a distinct name character and use
The use of expression manufacture  was explained in the case of Allenburry Engineers Pvt Ltd vs Ramakrishna Dalmia  Ors  In State of Orissa  Ors
vs The Titaghur Paper Mills Co Ltd  Anr  which was a decision on the Orissa Sales Tax Act this question was considered in the background of the fact whether planks cut into sizes etc sawed out of logs are different from logs in its nascent state
It may be worthwhile to note that manufacture  implies a change but every change is not manufacture and yet every change of an article is the result of treatment labour and manipulation
But something more was necessary and there must be transformation a new and different article must emerge having a distinct name character or use
See Union of India vs Delhi Cloth Mills supra at page 596 of the report
Having regard to the facts found in this case by the Tribunal which ultimately is the final fact finding authority we are of the opinion that regard being had to the principles for determining the questions which were correctly applied in the decision of the Tribunal in the facts of this case the conclusion of the Tribunal is unassailable
In the premises there is no merit in this appeal and the same is accordingly dismissed
NPV Appeal dismissed


Summary:
 In these writ petitions and civil appeals Lalit Narayan Mishra Institute of Economic Development and Social Change Patna a registered society and its Registrar Dr Jagadanand Jha challenged the constitutional validity of Bihar ordinances Nos 15 of 1986 and 30 of 1986 replaced by the Bihar Private Educational Institutions Taking over Act 1987  The Act 
Dr Jagadanand Jha further challenged the validity of the order of termination of his services as the Registrar of the Institute dated April 21 1986 in the writ petition Civil No 439 of 1987
As disposal of the writ petition Civil No 431 of 1987 wherein the constitutional validity of the Act was challenged and the writ petition Civil No 439 of 1987 above said would virtually mean the disposal of the other writ petitions and appeals the Court dealt with those two writ petitions
On April 19 1986 the State Government of Bihar promulgated ordinance No 15 of 1986 whereby the Lalit Narayan Mishra Institute of Economic Development and Social Change Patna  Institute  was taken over
On the day the ordinance was promulgated possession of the Institute was taken over and the services of Dr Jagadanand Jha the Registrar of the Institute were terminated by the impugned order dated April 21 1986
The petitioners filed Writ Petitions before the High Court challenging the validity of the said ordinance and the order of termination of the services of Dr Jagadanand Jha
The High Court dismissed the writ petitions Both the Society and Dr Jagadanand Jha preferred two appeals by special leave being Civil Appeal No 4142 of 1986 and Civil Appeal No 4141 of 1986 respectively
The Society and Dr Jagadanand Jha also challenged the ordinance No 30 of 1986 by Writ Petition Civil No 55 of 1987 and the constitutional validity of the Act replacing the said two ordinances
312 Allowing the writ petitions Civil Nos 87 of 1987 and 439 of 1987 and Civil Appeal No 4141 of 1986 in so far as they related to the order of termination of the services of Dr Jagadanand Jha and dismissing the writ petitions Civil Nos 55 of 1987 and 431 of 1987 and Civil Appeal No 4142 of 1986 the Court  HELD The provisions of the Act are the same as those of the two ordinances Nos 15 and 30 of 1986
The first attack on the validity of the Act and the ordinances was founded on the plea of violation of Article 14 of the Constitution
It was contended that the Act and the ordinances were discriminatory in nature and violative of Article 14 of the Constitution of India and should be struck down
The contention was wholly misconceived
The ordinances were not promulgated and the Act was not passed for the purpose of nationalisation of the Institute only
It was apparent from the provisions of the ordinances and the Act that the private educational institutions as defined therein were to be taken for the purpose as mentioned in the Preambles to the ordinances and the Act in a phased manner
All the institutions which answered the description given in section 2a of the Act were to be nationalised
It was not correct to say that the Institute had been signled out for nationalisation
319E 321D 323D F There can be no doubt that when nationalisation had to be done in a phased manner all the institutions cannot be taken over at a time
The nationalisation in a phased manner contemplates that by and by the object of nationalisation will be taken over
In implementing the nationalisation of the private institutions in phased manner the Legislature had started with the Institute and the question of singling out the Institute or treating it as a class by itself did not arise
It was the legislative decision that the Institute should be taken over in the first phase of nationalisation
The Legislature had not left it to the discretion of the executive government for the purpose of selecting the private educational institution for the first phase
It was very difficult to assail a legislative decision
Of course a legislative decision can be assailed if it is violative of any provision or part III of the Constitution
So far as Article 14 was concerned the Court did not think that it had any manner of application inasmuch as the question of discrimination did not arise as soon ss it was conceded that it was a case of in a phased manner and that for the first phase the Institute had been chosen by the Legislature itself
The Institute had been chosen by the legislative process
It was true that the ordinance Were promulgated under Article 213 of the Constitution bot it could not be characterised as an executive act
In any even ultimately the Legislature itself had 313 passed the Act with the inclusion of the Institute in the Schedule thereto as the only institution to be nationalised in the first phase
Even assuming that the question of discrimination might arise also for the purpose of selection for the first phase there were justifiable reasons for selecting the Institute for the first phase of nationalisation the State had changed the name of the Institute provided the site for the Institute got the building constructed through its own agencies and funds and supervised the prescription of syllabi
The fact could not be excluded that since 1975 it is the State of Bihar nurturing the Institute spending money and exercising necessary control over it and these facts fully justified the propriety of legislative wisdom in selecting the Institute for nationalisation in the first phase
323G H 324B C 325C E There could be no doubt that on the date the ordinances were promulgated and the Act was passed the same could not be challenged on the ground of non implementation of the legislative intent in nationalising similar institutes by amending the Schedule
If a legislative enactment cannot be challenged as discriminatory on the date it is passed it is difficult to challenge the same as violative of Article 14 of the Constitution on the ground of inaction of the executive in implementing the purposes of the Act regard being had to the fact that it was the Legislature which had made the selection for the first phase of nationalisation
If no such selection had been made by the Legislature and the entire thing had been left to the discretion of the Government it might have been possible to complain of discriminatory treatment
It is common knowledge that when any litigation ensues and remains pending the Government generally does not take any step till the final disposal of the litigation
It was apparent that in view of the pendency of litigations the State Government had granted approval of only temporary affiliation to the three institutions mentioned in the additional affidavit of the petitioner society and that too on certain conditions
If the State Government had no intention of taking over other institutions in accordance with the provisions of the Act it would have sanctioned permanent affiliation to the three institutions
The Court could not accept the contention of the petitioner society that the professed object of nationalisation in phases was a mere pretence and a colourable device to single out the Institute or that the facts of exclusion of eleven similarly situated Institutes and the subsequent recognition of the three other Institutes imparted vice of discrimination to the impugned Act
The question of discrimination or discriminatory treatment of the Institute did not arise and the contention of the petitioner society in this regard was rejected
325G H 326A B F 327E F 314 The next attack of the petitioner society to the impugned Act was A founded on violation of the provision of Article 191c of the Constitution
The question was whether the fundamental right of the petitioner society as conferred by Article 191c had been infringed or not and further whether the fundamental right to form association as contained in Article 191c of the Constitution also included within it the concomitants or the activities or the objects or purposes of an association
327F 328E  Article 191c confers a right on the citizens to form association
In exercise of such a right the petitioner society had constituted itself into an association
That right of the Society remained unimpaired and uninterfered with by the impugned Act and ordinances
There was no doubt that the Institute had been taken over by the provisions of the ordinances and the Act
It was true that with the taking over of the Institute the Society had lost its right of management and control of the Institute but that is the consequence of all acquisitions
When a property is acquired the owner loses all control interest and ownership of the property
Similarly the Society which was the owner of the Institute had lost all control and ownership of the Institute
It might be equally true that the Institute was the only activity of the Society but what was concerned was the right of the Society to form association
So long as there was no interference with the Society its constitution or composition it was difficult to say that because of the taking over or acquisition of the Institute which was the only property of activity of the Society the fundamental right of the Society to form association had been infringed
The decision of this Court in Damyanti Naranga vs Union of India  had not manner of application to the present case
The observations made in the decision of this Court in All India Bank Employees  Association vs National Industrial Tribunal   supported the view the Court had taken that the fundamental right guaranteed under Article 191c does not extend to or embrace within it the objects or purposes or activities of an association
It does not carry with it a further guarantee that the objects or purposes or activities of an association so formed shall not be interfered with by law except on grounds as mentioned in Article 194
In the circumstances the contention of the petitioner society that because of acquisition of the Institute the Society had lost its right of management over the Institute and the Institute being the main or the only activity of the Society the impugned legislations interfered with the right of the society to form and continue the association and as such were unconstitutional and void under Article 191c of the Constitution
was unsound and rejected
329C D 330B C E 331E G 332A B 315 Another ground on which the validity of the Act and the ordinances was assailed was the absence of legislative competence of the State Legislature Counsel for the petitioner society submitted that having regard to the pith and substance of the Act the Act fell within Entry 66 of List I and the Entry 25 of List III and Entry 66 of List I must be harmoniously construed but to the extent of overlapping the power conferred by Entry 66 must prevail over the power of the State under Entry 25
332C F By the impugned Act the Legislature has not laid down any law relating to the subjects mentioned in the Entry 66 List I or in Entry 25 List III
The Act only provides for the taking over of private educational institutions in phases and has taken over the Institute to start with for the first phase
An Entry in any of the Lists of Seventh Schedule will apply when a law is enacted by the Legislature on any of the subjects mentioned in the Entry
In this case the impugned Act does not lay down any law touching the subject referred to in Entry 66 List I or Entry 25 List III
Therefore neither of these two Entries applied
The Entry that applies to the impugned legislation is Entry 42 of List III pertaining to acquisition and requisition of property
The taking over of the private educational institutions and the Institute in the first phase is nothing but acquisition of property
The Institute was the property of the petitioner society and by the impugned Act the property stood transferred to and vested absolutely in the State Government free from all encumbrances
The only Entry relevant is Entry 42 of List III
As soon as Entry 66 of List I was excluded it was irrelevant which of the Entries 25 or 42 of List III was applicable in either case the State Legislature was competent to make the enactment
There was no substance in the contention of the petitioner society that the Act was invalid because the State Legislature had lacked competence in passing the same
333B F As it is held that the impugned Act is really a legislation relating to acquisition of property within the meaning of Entry 42 of list III the question might arise whether after the repeal of Article 312 by the Constitution Fourty Forth Amendment Act 1978 any compensation was compulsorily payable for the acquisition of property
The point was not ultimately pressed and the Court was not called upon to decide the point or express any opinion on the same
334B D The Court then dealt with the case of Dr Jagadanand Jha Registrar of the Institute whose services were terminated by an order dt
April 21 1986 as a result of the ordinance No 15 of 1986 promulgated on April 19 1986
334D E 316 The petitioner Dr Jagadanand Jha was not a member of the teaching staff he was the Registrar of the Institute which comes within the expression other categories of staff under sub section 4 of Section 6 of the said ordinance
It is true that under sub paragraph 4 it has been provided that sub paragraphs 2 and 3 shall apply mutatis mutandis but such application will be limited to the term of appointment and other conditions of service of a member of non teaching staff of the institution
In other words the State Government may appoint a committee for the purpose of considering the term of appointment and other conditions of service of the members of the non teaching staff and has to decide accordingly
It was thus apparent that the State Government proceeded on the basis that under sub paragraph 4 of paragraph 6 of the ordinance it was to consider the question of termination of the services of the members of the non teaching staff as in the case of the members of the non teaching staff as provided in sub paragraph 3 of paragraph 6 of the ordinance
Even then the Court was not impressed with the manner and haste in which the order of termination had been passed
Although it was alleged that a Committee had been formed and the State Government had terminated the services of the petitioner on the report of the Committee the Court could not understand the necessity for such haste in the circumstances it would not be unreasonable to infer that the Committee or the State Government had not properly applied its mind before the order of termination of the services of Dr Jha was made
336E H 337A B There can be no dispute that when there is a legislative direction for termination of the services of employees the compliance with the principles of natural justice may not be read into such direction and if such terminations are effected without giving the employees concerned an opportunity of being heard no exception can be taken on the same
But in this case sub paragraph 4 of paragraph 6 of the ordinance does not contain any direction for the termination of the services of the members of non teaching staff
Even in spite of that if the State Government wanted to terminate the services of the petitioner Dr Jha it could not be done without giving him an opportunity of being heard for such an act on the part of the State Government would be an administrative act
It is clear from the provision of sub paragraph 4 of paragraph 6 that the services of the members of the non teaching staff have been intended to be continued
The services of the petitioner Dr Jha who had been working in the post of Registrar of the Institute for a long time could not be terminated without giving him an opportunity of being heard
Counsel for the respondents also did not oppose this view
Therefore as the petitioner had not been given an opportunity of being 317 heard the impugned order of termination of the services of the petitioner could not be sustained
337C G 338A Both the Society and Dr Jha were not able to substantiate the allegation of mala fides against the then Chief Minister of Bihar
Even assuming although holding to the contrary that the Chief Minister had acted mala fide the same could not vitiate the legislative process in the exercise of which the impugned Act and the ordinances had been respectively passed and promulgated
The respondents also had failed to prove the alleged mismanagement of the Institute by the Society or Dr Jha the allegation of mismanagement was not pressed 
338B C The impugned order dated April 21 1986 of termination of the services of the petitioner Dr Jha was quashed
Writ Petitions Civil Nos 87 of 1987 and 439 of 1987 and Civil Appeal No 4141 of 1986 in so far as they related to the said order of termination of the services of Dr Jagadanand Jha were allowed
The State Government would be at liberty to consider the question of termination of the service of Dr Jha after giving him a reasonable opportunity to make representation
The Writ Petitions Civil Nos
55 of 1987 and 431 of 1987 and Civil Appeal No 4142 of 1986 were dismissed
338D E State of Rajasthan vs Mukandchand   Maganlal Chaganlal P Ltd vs Municipal Corporation of Greater Bombay   in re The Special Courts Bill 1978  Shri Ram Krishna Dalmia vs Shri Justice SR Tendolkar  Ors 5969 SCR 279 BS Reddy vs Chancellor Osmania University   Sakal Papers P Ltd vs Union of India   Dwarkadas Shrinivas of Bombay vs Sholapur Spinning  Weaving Co Ltd   Damyanti Naranga vs Union of India   All India Bank employees  Association vs National Industrial Tribunal   State of Bihar vs Maharajadhiraja Sir Kameshwar Singh of Darbhenga 1009 and KI Shephard vs Union of India  Ors
   referred to