Ore concentration as manufacture: marketable concentrates with distinct identity were held excisable, despite being intermediate products.

Grinding and washing ore into concentrates was treated as manufacture because the process produced a new commercially distinct product with a higher metal content, separate marketability, and a different name, character and use from the original ore. The concentrate remained excisable even though it was only an intermediate product, and the plea of double taxation was rejected because the concentrate and final metal were treated as different goods at different stages. The majority upheld excise liability, while the dissent considered the concentrate to be unchanged ore and not a new excisable commodity.

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Issues: Whether upgrading copper, molybdenite and magnetite ores into concentrates by grinding and washing amounts to manufacture so as to attract excise duty under the residuary tariff entry.

Analysis: The concentration process was held to bring about a product with a distinct commercial identity, since the concentrate contained a materially higher percentage of copper than the original ore, was separately bought and sold in the market, and was not merely an unchanged raw ore. The definition of manufacture was applied to require a transformation resulting in a new and different article with a distinct name, character or use. The fact that the concentrate was sold as an intermediate product did not take it out of excisability, and the plea of double taxation was rejected because the concentrate and the final copper metal were treated as different goods at different stages.

Conclusion: The concentrate was liable to excise duty and the appeal failed.

Dissenting Opinion: H.R. Syiem, Member, held that the concentrate remained ore, that concentration merely improved metallic content without changing character or use, and that marketability alone did not create a new excisable commodity. On that view, the product did not acquire excise liability and the appeal ought to have been allowed.

Final Conclusion: The majority treated the concentrate as a distinct marketable product amounting to manufacture for excise purposes, while the dissent viewed it as unchanged ore.

Ratio Decidendi: A process that converts ore into a separately marketable concentrate with a distinct commercial identity and transformed composition amounts to manufacture for excise purposes even if the concentrate is an intermediate product.

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