Kit assembly is not manufacture when distinct marketable items retain their identity and no transformation occurs.

Putting purchased colour cakes and a painting brush together in a box and clearing them as water colour boxes was treated as packing or kit formation, not manufacture under section 2(f) of the Central Excise Act, 1944. The controlling principle applied was that assembling distinct, marketable articles into a kit does not amount to manufacture where their identity remains unchanged and no transformation occurs. On that basis, the activity was held not to create a new manufactured product.

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Issues: Whether placing purchased colour cakes and a brush in a box and clearing them as water colour boxes amounts to manufacture under section 2(f) of the Central Excise Act, 1944.

Analysis: The respondents did not manufacture the colour cakes. The activity undertaken was only putting the colour cakes and a painting brush together in a box. The cited precedent held that assembling different articles into a kit does not amount to manufacture where the identity of the individual items remains unchanged and no transformation takes place. Applying that principle, the activity was treated as mere packing or kit formation and not as a manufacturing process.

Conclusion: The activity did not amount to manufacture under section 2(f) of the Central Excise Act, 1944.

Ratio Decidendi: Mere placing of distinct, marketable articles together in a box or kit, without any transformation of their identity, does not constitute manufacture.

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