M/S. Usha Rectifier Corpn.(I) Ltd vs Commnr. Of Central Excise, New Delhi

The Supreme Court held that under Section 3 of the Central Excises and Salt Act, 1944, excise duty is applicable only when there is a clear act of manufacture or production. The Court found that the appellant's activities did not constitute manufacture as they were primarily for research and development purposes, and thus, the demand for excise duty of Rs. 4,92,566.28 was not justified. The Court overturned the decisions of the lower authorities, including the CEGAT, and ruled in favor of the appellant, stating that no excise duty was leviable in this case.