Manufacture under central excise: wire drawing from wire rods was outside manufacture for the disputed period, defeating duty and penalties.

Drawing wire from wire rods was treated as not amounting to manufacture for the period in dispute, because the later insertion of Note 10 in Section XV of the Central Excise Tariff Act indicated that the activity was treated as manufacture only from the amended stage. As the goods were therefore not excisable during that period, the valuation dispute became irrelevant and the duty demand could not survive. Penalties based on the same demand were also unsustainable.

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Issues: Whether the process of drawing wire from wire rods amounted to manufacture during the relevant period, and whether the duty demand and penalties could therefore survive.

Analysis: The process in question was held to be outside the scope of manufacture for the relevant period, as the later amendment inserting Note 10 in Section XV of the Central Excise Tariff Act showed that such activity was treated as manufacture only from the amended stage. Once the goods were held to be not excisable, the valuation dispute also ceased to have relevance, and the penalties predicated on the duty demand could not stand.

Conclusion: The demand and penalties were unsustainable because the activity did not amount to manufacture during the period in dispute.

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