Crushing and sieving pyrites without a new product is not manufacture; processing area remains part of the mine.

Crushing and sieving low-grade pyrites did not amount to manufacture because the process did not create a new product and the material retained the same chemical composition, only its form changed; excise duty under Tariff Item 68 therefore was not attracted. The premises used for that processing were not a factory under the Factories Act because no manufacturing process occurred, and they were treated as part of the mine under the Mines Act because the activity was carried on adjacent to the mine for preparing the mineral for sale. The appellate order was affirmed, the excise proceedings were set aside, and the stay was vacated.

---

---

Issues: (i) whether crushing and sieving low-grade pyrites changed their identity so as to amount to manufacture and attract excise duty under Tariff Item 68; (ii) whether the premises where such processing was carried on constituted a factory or formed part of a mine.

Issue (i): Whether crushing and sieving low-grade pyrites changed their identity so as to amount to manufacture and attract excise duty under Tariff Item 68.

Analysis: The essential test was whether any new product came into existence. The material on record showed that the pyrites retained the same chemical composition after crushing and sieving, and only their form changed. Since the substance continued to be pyrites and no new commodity emerged, the process did not satisfy the legal concept of manufacture.

Conclusion: The process of crushing and sieving low-grade pyrites did not amount to manufacture and did not attract excise duty under Tariff Item 68.

Issue (ii): Whether the premises where such processing was carried on constituted a factory or formed part of a mine.

Analysis: A place is a factory only if the activity carried on there amounts to a manufacturing process within the relevant statutory definition. As the crushing and sieving activity was not manufacture, the premises could not be treated as a factory under the Factories Act. On the other hand, the premises were adjacent to the mine and the processing there was undertaken for preparing the mineral for sale, bringing the location within the statutory concept of a mine.

Conclusion: The premises were not a factory and formed part of the mine within the meaning of the Mines Act.

Final Conclusion: The order of the appellate authority was affirmed, the excise proceedings were set aside, and the stay stood vacated.

Ratio Decidendi: Crushing or sieving a mineral without any change in its chemical composition or emergence of a new product does not amount to manufacture, and premises used for such non-manufacturing processing within the mine area remain part of the mine rather than a factory.

---