Manufacture under excise law requires a new commodity; camphor tablets from powder did not qualify, and the extended period failed.

Conversion of camphor powder into camphor tablets was held not to amount to manufacture because the process only changed the physical form and convenience of use, without bringing into existence a new and distinct commodity with a different name, character or use. On that basis, no central excise duty was attracted. The extended period of limitation was also found unavailable because the record showed departmental clarification and trade notice supporting a bona fide belief, and there was no proof of conscious suppression of facts or intent to evade duty. The demand was therefore time-barred.

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Issues: (i) Whether conversion of camphor powder into camphor tablets amounts to manufacture under the Central Excise law; (ii) Whether the demand could be raised for the extended period on the basis of suppression of facts or intent to evade duty.

Issue (i): Whether conversion of camphor powder into camphor tablets amounts to manufacture under the Central Excise law.

Analysis: The process involved grinding of camphor, adding a small quantity of coconut oil for lubrication, pressing the material into tablets and packing them for market. The reasoning applied the settled test that manufacture requires emergence of a new and distinct commodity having a different name, character or use. The conversion resulted only in a change of physical form and convenience of use, while the material remained camphor. The finding that no new commodity emerged was supported by the absence of any challenge to the factual conclusion that coconut oil did not alter the character of the product.

Conclusion: The process did not amount to manufacture and the assessee was not liable to duty on that basis.

Issue (ii): Whether the demand could be raised for the extended period on the basis of suppression of facts or intent to evade duty.

Analysis: The record showed departmental clarification and trade notice indicating that camphor tablets made from duty-paid camphor were not treated as manufacture, supporting the assessee's bona fide belief. In the absence of material showing conscious or deliberate suppression with intent to evade duty, the extended period could not be invoked. The burden to establish the conditions for the extended limitation rested on the Revenue and was not discharged.

Conclusion: The extended period of limitation was not available and the demand was time-barred.

Final Conclusion: The Revenue appeals failed on both manufacture and limitation, and the assessee's relief was maintained.

Ratio Decidendi: A process amounts to manufacture only when it brings into existence a new and distinct commodity, and the extended limitation under excise law cannot be invoked without proof of suppression or intent to evade duty.

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