Manufacture test in central excise excludes mere steel fabrication and permanently embedded sheds from duty liability.

Fabrication of steel members by cutting, drilling and welding duty-paid plates, channels, angles, joists and beams did not amount to manufacture for central excise because the processed items retained their essential identity and did not emerge as a new and distinct commercial commodity. The erected shed also was not excisable goods, as once fixed to the concrete foundation and permanently embedded it became immovable property. Mere assembly or site fabrication is insufficient for levy unless it produces a commercially different article; on these facts, no central excise duty was attracted.

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Issues: Whether fabrication of steel structurals by cutting, drilling and welding duty-paid raw materials resulted in manufacture of excisable goods, and whether the shed erected from such structurals was goods liable to central excise duty.

Analysis: The material on record showed that the Contractor received plates, channels, angles, joists and beams from the project, cut them to size, and assembled them by simple processes of cutting, drilling and welding into members such as trusses, purlins, columns, girders, walkways and bracings. Applying the settled test of manufacture, a process amounts to manufacture only when it brings into existence a new and distinct commercial commodity having a different name, character or use. The fabricated members retained the essential identity of the original steel materials and were only assemblies for erection work; they did not emerge as commercially different goods. The erected shed, once fixed to the concrete foundation and permanently embedded, became an immovable property and therefore did not answer the description of goods.

Conclusion: Fabrication of the steel structurals did not amount to manufacture of excisable goods, and the shed erected from them was not goods liable to duty.

Ratio Decidendi: For central excise, mere processing or assembly does not attract levy unless it results in a commercially new and distinct article, and an immovable structure erected at site is outside the scope of excisable goods.

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