No manufacture on steel erection processes where materials retain identity and no distinct excisable goods emerge.

Processes carried out on steel materials for erection work do not amount to manufacture where the original steel substantially retains its identity and no new goods with a distinct character emerge. Components such as columns, trusses, beams, girders and similar items used to facilitate assembly at site were treated as ancillary to construction, so the excise duty demand under Item 68 was unsustainable. The absence of any identifiable duty-confirmed goods also undermined the demand. No basis existed for alleging intentional evasion, so penalty was likewise unwarranted.

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Issues: Whether the processes carried out on steel materials for erection work resulted in manufacture of new goods liable to duty under Item 68 of the Central Excise Tariff, and whether penalty was warranted.

Analysis: The Board found that the orders did not identify any specific goods on which duty was confirmed. The materials processed were described as columns, trusses, beams, girders, platforms, sandrails, side-runners and similar components used as part of erection work. On the facts explained, the operations were only ancillary to construction and were carried out to facilitate assembly at site. The original steel material retained its identity in most cases, and the processed items formed part of the structure for erection. Since the processing did not bring into existence new goods, the duty demand under Item 68 was not sustainable. The Board also found no basis for alleging intentional evasion so as to justify penalty.

Conclusion: The processes did not amount to manufacture of new excisable goods, and the duty demand and penalty were unsustainable.

Ratio Decidendi: Processes undertaken on steel materials for erection work do not attract excise duty where they do not result in the emergence of new goods with a distinct identity and the original material substantially retains its character.

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