Prospective application of manufacture amendment confirmed; dilution and formulation remained non-manufacture under the earlier ruling.

A budget amendment to a Chapter Note treating dilution or formulation as manufacture was treated as a substantive legislative change and not a clarificatory provision, so it operated only prospectively. The Tribunal also relied on the existing Board Circular and the earlier ruling in Markfed Agro Chemicals, which had found that the process did not amount to manufacture. On that basis, the earlier decision rejecting retrospective application of the amendment was followed and the Revenue's appeals were rejected.

---

---

Issues: Whether the budget amendment to the Chapter Note treating the process as manufacture had retrospective effect, and whether the Revenue's appeals could succeed in view of the earlier Tribunal decision.

Analysis: The Tribunal noted that the same impugned order had already been considered and that the Commissioner (Appeals) had found, on the basis of the existing Board's Circular and the earlier Tribunal ruling in Markfed Agro Chemicals, that the process of dilution/formulation did not amount to manufacture. It further held that the subsequent budgetary change was a legislative amendment and not merely clarificatory in nature, and therefore could operate only prospectively. The earlier decision had already rejected the Revenue's plea for retrospective application of the amendment.

Conclusion: The amendment was held to be prospective only, and the Revenue's appeals were rejected.

---