Mere winding of yarn into cones is not manufacture where the product remains the same commercial good.

Winding single ply yarn from cops or bobbins into cones did not amount to manufacture because the process did not change the yarn's name, character, or use. Although Chapter Note 1 to Chapter 52 treats winding or conversion from one form to another as manufacture, a fresh levy arises only where the process results in new goods. On the facts, the yarn remained the same commercial product throughout, no new and distinct excisable product came into existence, and a second duty demand was not sustainable.

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Issues: Whether winding single ply yarn from cops/bobbins into cones amounts to manufacture resulting in a new excisable product liable to duty again.

Analysis: The Department produced no evidence that the yarn was marketed at the spindle stage. The yarn remained single ply yarn throughout, and winding it into cones did not change its name, character, or use. Although Chapter Note 1 to Chapter 52 treats winding or conversion from one form to another as manufacture, duty can arise only if the process results in new goods. On the facts, no new product came into existence, and the Tribunal followed its earlier view that mere winding of the same yarn does not amount to a fresh transformation into a different finished product.

Conclusion: The process did not create new goods and did not justify a second levy of duty.

Final Conclusion: The revenue challenge failed because the goods remained the same commercial product and the demand could not be sustained.

Ratio Decidendi: Mere winding of yarn into a different form does not amount to manufacture for a fresh levy unless the process produces a new and distinct excisable product.

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