Exhausted waste residue is not manufactured goods unless a new and distinct commodity emerges from the process.

Spent earth generated from the use of activated earth in bleaching and decolourising oil was not a manufactured excisable product. Manufacture requires a process that brings into existence a new and distinct commodity with a different character, use or value, and the residue here was only an exhausted, degraded waste product. Its later saleability or use in cheap soap did not convert it into a product of manufacture, and prior duty on the activated earth supported the conclusion that duty could not be levied again on the same material in its depleted form.

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Issues: Whether spent earth arising during soap manufacture was a manufactured excisable product liable to duty under item 68 of the Central Excise Tariff.

Analysis: The spent earth was not produced as a new article by any process of manufacture; it resulted only from the depletion of activated earth after it had been used in bleaching and decolourising oil. Manufacture contemplates a process that brings into existence a new and distinct commodity with a different character, use, or value. Here, the material only lost its original utility and became a baser waste product. Its saleability and use in cheap soap did not convert it into a manufactured product. The fact that the activated earth had already suffered duty also weighed against treating the same material, in its degraded form, as liable to duty again.

Conclusion: Spent earth was not a manufactured excisable product and was not liable to duty under item 68.

Ratio Decidendi: A depleted or waste residue obtained merely by the exhaustion of an input in manufacture does not become an excisable manufactured product unless a new and distinct commodity emerges by a process of manufacture.

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