Integrated foil processing for cigarette packing was not manufacture because no distinct excisable product emerged.

Embossing and cutting aluminium foil used in cigarette packing was treated as part of an integrated and continuous process, with no separate assessable commodity shown to emerge. Because the cigarette was assessed in packed condition and no new or distinct product was produced, the activity was held not to amount to manufacture for central excise purposes. The earlier view that such foil processing was not manufacture was accepted, and the activity was treated as not separately excisable.

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Issues: Whether embossing and cutting aluminium foil used in cigarette packing amounts to manufacture exigible to central excise duty.

Analysis: The process was found to be an integrated and continuous process, and the aluminium foil could not be assessed separately, particularly because the cigarette was assessed in packed condition. No evidence was brought on record to show that a new and distinct product emerged from the process. In these circumstances, the reasoning adopted in the earlier decision holding that such activity did not amount to manufacture was accepted.

Conclusion: The process did not amount to manufacture and was not separately excisable.

Final Conclusion: The Revenue's challenge failed, and the view that the activity was not manufacture was affirmed.

Ratio Decidendi: A continuous integrated process that does not bring into existence a new product, and for which no separate assessable commodity is shown to emerge, does not amount to manufacture for excise purposes.

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