Site assembly of dragline machines amounts to manufacture, while workshop-only exemption was unavailable for mine-site erection.

Assembly of dragline machine components at the mine site created a new product with a different name, character and use, amounting to manufacture for central excise purposes and placing the goods under Chapter Heading 84.29. The machines were therefore excisable and liable to duty. The claimed exemption under Notification No. 182/87 was unavailable because manufacture took place in an open yard or open area at the mine site, which could not be treated as a workshop situated in the mines. A workshop-specific exemption could not be extended to such site erection, so the exemption claim failed.

---

---

Issues: (i) Whether the dragline machines assembled at site amounted to manufacture of excisable goods; (ii) Whether the machines were entitled to exemption under Notification No. 182/87.

Issue (i): Whether the dragline machines assembled at site amounted to manufacture of excisable goods;

Analysis: The components of the dragline machines were assembled at the site and, upon such assembly, a new product with a different name, character and use came into existence. Such site assembly resulted in manufacture within the meaning relevant to excise duty, and the goods were classifiable under Chapter Heading 84.29 of the Central Excise Tariff Act, 1985.

Conclusion: The dragline machines were excisable goods and liable to central excise duty.

Issue (ii): Whether the machines were entitled to exemption under Notification No. 182/87.

Analysis: The exemption was unavailable because the machines were manufactured in an open yard or open area at the mine site, which could not be treated as a workshop situated in the mines. The notification did not support treating a special platform in an open yard as a workshop for the purpose of exemption.

Conclusion: The machines were not entitled to exemption under Notification No. 182/87.

Final Conclusion: The findings that the dragline machines were manufactured excisable goods and that the claimed exemption was unavailable were sustained, leaving no basis for interference with the assessment.

Ratio Decidendi: Assembly of components at site that produces a new commodity with distinct name, character and use amounts to manufacture, and an exemption confined to manufacture in a workshop cannot be extended to an open yard merely because the goods are erected there.

---