Packing finished fertilisers into gunny bags is not manufacture and does not attract excise duty.

Packing finished chemical fertilisers into gunny bags after the levy date does not amount to manufacture under the Central Excises and Salt Act, 1944. Duty arises only when excisable goods are produced or manufactured, and the statutory expansion of manufacture covers only processes incidental or ancillary to completing a manufactured product. Packing a completed product for convenience, preservation, or identification does not change its character or complete manufacture. The Fertiliser (Control) Order and the excise collection stage do not alter that conclusion, so no excise duty is leviable on the stock in question.

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Issues: Whether packing of chemical fertilisers into gunny bags after the levy date amounted to manufacture so as to attract excise duty.

Analysis: Under Section 3(1) of the Central Excises and Salt Act, 1944, duty is attracted only when excisable goods are produced or manufactured in India. Section 2(f) expands manufacture to include processes incidental or ancillary to the completion of a manufactured product. The packing of finished fertilisers into containers for convenience, preservation, or identification does not alter the character of the finished product and is not a process of manufacture properly so called. The packing requirement under the Fertiliser (Control) Order and the stage of collection under the excise rules do not decide whether packing constitutes manufacture.

Conclusion: Packing of the fertilisers after 28 February 1969 was not manufacture, and no excise duty was leviable on the stock in question.

Ratio Decidendi: Packing of a fully manufactured product into containers, without any further process that completes manufacture, is not manufacture within the meaning of Section 2(f) of the Central Excises and Salt Act, 1944.

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