Keora water classification and manufacture: filtration of an aqueous distillate did not create a new product.

Keora water, being an aqueous distillate of essential oil, remained classifiable under Heading 33.01 rather than Heading 33.03 because filtration and repacking did not change its essential character and Chapter 33 excludes such products from the later headings. The purification process merely removed impurities and did not bring into existence a new product with a different name, character, or use, so it did not amount to manufacture. On that basis, the duty demand was not sustainable and the appeals succeeded.

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Issues: (i) Whether keora water, after filtration and repacking, was classifiable under Heading 33.01 or Heading 33.03 of the Central Excise Tariff; and (ii) Whether the filtration and purification undertaken by the assessee amounted to manufacture.

Issue (i): Whether keora water, after filtration and repacking, was classifiable under Heading 33.01 or Heading 33.03 of the Central Excise Tariff.

Analysis: The product was admitted to be an aqueous distillate of essential oil. Heading 33.01 covers essential oils and aqueous distillates and aqueous solutions of essential oils, while Note 2 to Chapter 33 excludes such products from Headings 33.03 to 33.07. The product remained an aqueous distillate even after purification, and no other material was added. The use as perfumery did not alter its classification.

Conclusion: The product was classifiable under Heading 33.01 and not under Heading 33.03.

Issue (ii): Whether the filtration and purification undertaken by the assessee amounted to manufacture.

Analysis: The process consisted only of removing impurities and undesirable materials by filtration. No new product with a different name, character, or use emerged from the process. Mere purification does not amount to manufacture, and Note 4 to Chapter 33 did not apply because the product did not fall under Headings 33.03 to 33.05.

Conclusion: The process did not amount to manufacture.

Final Conclusion: The duty demand could not be sustained, and the appeals succeeded.

Ratio Decidendi: A product that remains an aqueous distillate of essential oil continues to fall under Heading 33.01, and mere filtration or purification removing impurities, without creation of a new product having a different name, character, or use, does not constitute manufacture.

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