Crumb rubber processing not manufacture where no new commercial or chemical product emerges, leaving central excise duty inapplicable.

Powdering scrap tyres into crumb rubber was held not to amount to manufacture for central excise purposes because the process did not produce a new product commercially or chemically. The tribunal relied on an earlier view that crushing rubber into powder is not manufacture, which had been upheld when the department's challenge failed before the Supreme Court. As the appellants' process was stated to be the same as that earlier considered, the activity remained outside excise liability and the impugned order was set aside.

---

---

Issues: Whether powdering of scrap tyres to make crump rubber amounts to manufacture attracting central excise duty.

Analysis: The activity was considered in the light of the earlier tribunal view that crushing rubber into powder does not amount to manufacture. That view had also been upheld when the department's challenge was dismissed by the Supreme Court on the ground that the crushed product was not a new product, commercially or chemically, and the finding was essentially one of fact. The appellants' process was stated to be the same as that of their competitor in the earlier case.

Conclusion: The activity does not amount to manufacture and is not liable to central excise duty. The appeal is allowed and the impugned order is set aside.

---