Manufacture test for wire drawing turns on the exact process, requiring fresh verification before any duty demand can stand.

Drawing of wires from wire rods was treated as a potential non-manufacturing activity, but the applicability of that principle depended on the exact process actually undertaken by the assessee. Because the factual record did not clearly establish whether the activity was only thickness reduction by drawing or some other manufacturing process, the matter had to be verified afresh by the adjudicating authority. If the process was found to be mere drawing of wires, the duty demand could not be sustained, as such activity would not amount to manufacture for the relevant period.

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Issues: Whether the activity of drawing or processing bright steel bars and wires amounted to manufacture for the period prior to 9-7-2004, and whether the matter required remand for verification of the exact manufacturing process.

Analysis: The levy and penalty arose from a shortage-based demand under the Central Excise Rules. The appellants sought to rely on the principle that drawing of wires from wire rods does not amount to manufacture, together with the subsequent insertion of Note 10 in Section XV of the Central Excise Tariff Act, 1985, and the Board circular clarifying the position. The relevant difficulty was that the exact process undertaken by the appellants had not been clearly placed before the authorities or the Tribunal. In the absence of a clear factual record describing whether the process was merely thickness reduction by drawing wires or some other manufacture, it was necessary to verify the actual process before deciding the applicability of the Supreme Court principle.

Conclusion: The matter was required to be examined afresh by the adjudicating authority, and if the process was found to be mere drawing of wires, the demand could not be sustained as the activity would not amount to manufacture.

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