Wire drawing of duty paid rods is not manufacture when no commercially distinct new article emerges.

Cold drawing of duty paid wire rods was held not to amount to manufacture under section 2(f) of the Central Excise Act, 1944, because the process did not bring into existence a commercially distinct new article. Applying the cited precedent, CEGAT rejected the Revenue's contention that the drawn wire became an excisable commodity. The resultant goods were therefore not liable to Central Excise duty, and the demand for duty, interest and penalties was set aside with consequential relief.

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Issues: Whether cold drawing of duty paid wire rods amounts to manufacture under section 2(f) of the Central Excise Act, 1944, so as to attract excise duty, interest and penalty.

Analysis: The Tribunal held that the issue was no longer res integra. It followed the cited precedent and accepted that, where the input is duty paid wire rods, the process of drawing them does not bring into existence a commercially distinct product for the purpose of manufacture. The Tribunal therefore rejected the Revenue's contention that the process resulted in an excisable new commodity.

Conclusion: Cold drawing of the duty paid wire rods did not amount to manufacture, and the resultant goods were not liable to Central Excise duty.

Final Conclusion: The demand of duty, interest and penalties was unsustainable and the impugned order was set aside with consequential relief.

Ratio Decidendi: A process of wire drawing carried out on duty paid wire rods does not amount to manufacture under section 2(f) of the Central Excise Act, 1944 unless it results in a commercially distinct new article.

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