Medical Research Foundation vs -Kolkata South

IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE
TRIBUNAL, KOLKATA
EASTERN ZONAL BENCH : KOLKATA

REGIONAL BENCH - COURT NO.2

Excise Appeal No.75410 of 2021

(Arising out of Order-in-Appeal No.22/Kol-South/21 dated 08.02.2021 passed by
Commissioner of CGST & CX, Appeals-I, Kolkata.)


M/s. Medical Research Foundation
Aditya Birla Sankara Netharalaya
(147, Mukundapur, EM Bypass, Purba Jadavpur Thana, Kolkata-700099.)
…Appellant
VERSUS
Commissioner, CGST & CX, Kolkata South
…..Respondent
(GST Bhawan, 180, Shantipally, Rajdanga Main Road, Kolkata-700107.)


APPEARANCE

Shri A.D.Ray & Shri Susanta Kr. Dutt, Advocates for the Appellant (s)
Shri P.Halder, Authorized Representative for the Revenue

CORAM: HON’BLE SHRI R. MURALIDHAR, MEMBER(JUDICIAL)

FINAL ORDER NO. 76585/2026

DATE OF HEARING : 07.10.2026
DATE OF DECISION : 05.11.2026

R. MURALIDHAR :
On the ground that the Appellant is manufacturing Spectacles
falling under CET 9004, a Show Cause Notice came to be issued on
04.12.2017 in respect of their transactions during the period November
2012 to June 2017. The Show Cause Notice was issued by invoking the
extended period provisions demanding Rs.14,21,647/-. The Appellants
submitted their detailed reply contending that the fixing up of lenses in
the frames would not amount to manufacture in terms of Section 2(f) of
the Central Excise Act, 1944. After due process, the lower authorities
have confirmed the demand.

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2. During the hearing conducted on 07.10.2026, both sides have
argued and have made their submissions. The Appellants had placed
reliance on the Hon’ble Madras High Court’s decision in the case of
Titan Company Ltd. and Others v. Commissioner of Central
Excise LTU, Chennai and Others [W.P. Nos. 37765 of 2016 and
1038 & 1039 of 2017 and WMP Nos.1008 & 1009 of 2017 and
32365 of 2016 vide Order dated 21.10.2021] and has also relied
on the Mehta Optician’s case decided by the Hon’ble Supreme Court.
The Office of the AR was granted time till 15.10.2026 to bring in any
decision which is contrary to these orders. As per the available records,
the Office of the AR has not been able to find out any contrary order in
respect of this issue till now.

3. I find that this issue as to whether fixing of lenses in the frames
is no more res integra. The Hon’ble Madras High Court in the case of
Titan Company Ltd. and Others v. Commissioner of Central
Excise LTU, Chennai and Others , cited supra, has held as under :
“4. Essentially, the process leading to manufacture of a
product/commodity would involve appreciation of facts that are best left
to the officers of the concerned Department. Thus, and to get over the
question of alternate remedy, the petitioners would immediately draw
my attention to a judgment of the Hon‟ble Supreme Court in the case of
Assistant Commercial Tax Officer Vs. Mehta Opticians (Civil Appeal
No.773 of 1995) confirming the decision of the Rajasthan High Court on
the very issue that falls for consideration in this batch.
5. The short judgment of a three Judge Bench is on point, and reads as
under:
„This is how Ground A (a) of the Special Leave Petition (reads):
“(a) Whether the High Court is justified in holding as under:-
It is not in dispute that frames and glasses are exempted
from payment of tax. The spectacles being not a different
commodity would not attract tax on their sales.

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Particularly, when there is no exemption notification
exempting frames and glasses from payment of tax and
both the frames and glasses are exigible to tax @ 8%.”
When Mr.S.K.Jain, Learned counsel for the appellant, proceeded
to argue, we drew his attention to paragraph 5 of the judgment
of Court under appeal, which is quoted in the ground above […]
Mr.Jain persisted in arguing that frames and glasses were not
exempted from payment of tax. We pointed out to him that it
was impermissible for him to so argue when the High Court had
specifically recorded that “it is not in dispute” that frames and
glasses were exempted from payment of tax and no application
had been made by the appellant to the High Court to correct this
statement, it was only when we commenced the dictation of an
order to so record that Mr.Jain said that he would not urge this
contention.

All that an optician does, as the record suggest is to fit lenses
into a spectacle frame: he carries out no process of manufacture
and no separate or distinct commodity emerges. The judgment
under appeal is, therefore, uphold.

The appeal is dismissed with costs.
6. The above judgment, according to the petitioner, is binding upon the
parties in terms of Article 141 of the Constitution of India. The issuance
of the impugned show cause notices and the continuation of the
proceedings thus constitute a fundamental and jurisdictional flaw,
rendering the proceedings bad in law, and the present Writ Petitions,
maintainable.
…………
9. Additionally and in order to aid better understanding of the issue, the
petitioners also take me through a series of decisions also involving the
same issue on merits, that is, whether the fitting of prescription lenses
upon spectacle frames would constitute „manufacture‟ for the purposes
of levy of central excise duty.

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10. In the case of Bholanath Sreemany, a Division Bench of the
Calcutta High Court dealt with the identical issue and the description of
the activity undertaken by that assessee is set out as follows:
„The petitioner states that in the course of his business, a
customer comes to him with a prescription from a doctor, selects
a particular frame, settles the price thereof and the frame is then
appropriated to the contract of sale within the meaning of
explanation 2(a) to Section 2(g) of the Bengal Finance (Sales
Tax) Act, 1941. The petitioner then fixes the glasses, according
to prescription, to the frame which has already become the
chattel of the customer. There are thus two distinct sales-one of
frame and the other of the glasses and it is the case of the
petitioner that he does not charge anything for fitting. It is
alleged that the Commercial Tax Officer, Alipore, who examined
the petitioner‟s books of account, records and documents under
Section 14(1) of the Act, completely misunderstood the nature of
the transaction and the legal implication thereof and by an order
dated 7 th April, 1970, held that the petitioner manufactures
spectacles from parts of spectacles purchased by him and sells
such spectacles to customers.‟

11. Upon consideration of the above factual matrix, the Bench held that
while manufacture implies a change, every change would not be
manufacture. There must be a transformation of the raw materials into
a new and distinct article having a distinctive name, character or use.
The Bench was of the view that a manufacturer of spectacle, by
assembling the lenses and the frames, does not create anything new so
as to bring such activity within the purview of manufacture.
………………………
14. Yet another argument advanced was that though the petitioner has
been engaged in the same activity for several years, the impugned
show cause notices had come to be issued in 2016 without there being
any justification in that regard or any change in circumstances. Having
accepted the stand of the petitioner for many years to the effect that
the activity of assembly of frames and spectacles did not constitute
manufacture, there was no justification in the Revenue taking a

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different stand now. The judgment of the Hon‟ble Supreme Court in the
case of Radhasoami Satsang V. Commissioner of Income Tax ((1992) 1
SCC 659) is relied on for this proposition.
…………………….
20. To a pointed query put by the Court, the petitioners would
specifically confirm that manufacture of the power lens i.e., the
conversion of lens blanks into prescription lens is a taxable activity and
that such activity takes place in the workplace/factory. They also
confirm that the frames used are either imported or manufactured
indigenously in a factory, subject to central excise duty. These two
activities i.e. manufacture of the spectacle frames and prescription
lenses are, admittedly excisable events and the petitioners are liable to
remit duty in regard to the aforesaid two events, where applicable. The
petitioners also engage in sale of ready-made eye-wear that is
purchased by customers, off-the-shelf. I am not, in these writ petitions,
concerned with either of the aforesaid activities.
21. Post manufacture of the spectacle frames and lenses, the goods are
sent separately to the petitioners‟ show rooms and what is undertaken
in the show room is only an assembly of the prescription lenses and the
spectacle frames wherein the lenses are merely mounted upon the
frames, to result in a spectacle.
22. No doubt, the minute break-down of the machinery and the
processes as described in the SCN indicate a chain of events requiring
skill and sophistication, that appear very significant in magnitude and
impact. However, the end result of all the processes only results in
assembly of the lens with the frame. This, in my view, does not amount
to manufacture. The process of assembly is bound to involve some
amount of refining and fine-tuning of the individual components and
this, by itself, will not tantamount to manufacture. In fact, most
establishments engaged in selling eye-wear provide a gamut of services
in this area including, having an optician in their employ or on call, and
infrastructure for the testing of vision. Thus, notwithstanding that a
distinct commercial product is obtained upon assembly of a lens with a
spectacle frame, this would not result in such assembly being equated
to manufacture.

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23. The judgments in the cases of Mehta Opticians, Bholanath
Sreemany and Amazon decide and reiterate the issue of whether the
activity of assembly simpliciter including fitting and minor adjustments
that are part and parcel of the process of assembly, constitute
„manufacture‟ for the purposes of the Act, in favour of the assessee.
The show cause notices, to this extent, and insofar as they purport to
equate the process of assembly to manufacture, are quashed.”

4. I find that to the facts of the present case, the cited case law of
the Hon’ble Madras High Court is squarely applicable. Therefore,
following the ratio laid down therein, I set aside the impugned order
and allow the Appeal. The Appellant would be eligible for consequential
relief, if any, as per law.

(Order pronounced in the open court on 05.11.2026.)

Sd/
(R. MURALIDHAR)

MEMBER (JUDICIAL)

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