Fitting Lenses into Spectacle Frames Is Not Manufacture: CESTAT Kolkata

CESTAT Kolkata set aside a ₹14.21 lakh excise demand on a medical research foundation, following the Madras High Court’s view that assembling prescription lenses into frames creates no new commodity.

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Kolkata, has held that fitting prescription lenses into spectacle frames does not amount to manufacture, so no central excise duty arises on the spectacles that result. The issue was held to be no longer open [Medical Research Foundation Aditya Birla Sankara Netharalaya v. Commissioner, CGST & CX, Kolkata South, 2026-juristway.com-3326-CESTAT(Kolkata)-CE].

The appeal was decided by R. Muralidhar, Member (Judicial). A show cause notice (SCN) dated 4 Dec 2017 invoked the extended period for November 2012 to June 2017. It treated the appellant as a manufacturer of spectacles under CET 9004 and demanded ₹14,21,647. The appellant replied that fixing lenses in frames is not manufacture, but the demand was confirmed and upheld on appeal.

The Tribunal relied on the Madras High Court in 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), decided on 21 Oct 2021. That judgment rested on the Supreme Court’s ruling in Assistant Commercial Tax Officer Vs. Mehta Opticians (Civil Appeal No.773 of 1995). There, the Supreme Court said an optician who fits lenses into a frame “carries out no process of manufacture and no separate or distinct commodity emerges”.

The Madras High Court also referred to the Calcutta High Court in Bholanath Sreemany. That ruling held that manufacture requires a new and distinct article with a distinctive name, character or use, and that assembling lenses and frames creates nothing new. The High Court accepted that the lenses and frames are made elsewhere, in a factory, and that the showroom only mounts the lenses on the frames. However skilled the process, the end result is only assembly. Assembly with fitting and minor adjustments is not manufacture, and show cause notices treating it as such were quashed.

Finding that ruling squarely applicable, the Tribunal set aside the impugned order and allowed the appeal with consequential relief.

2026-juristway.com-3326-CESTAT(Kolkata)-CE