Assembly of supplied parts as manufacture: emergence of a new excisable product sustained liability, penalty and redemption fine.

Assembly of supplied parts at a taxpayer's premises may amount to manufacture where the process yields a new excisable product, such as refrigerating and air-conditioning appliances under Tariff Item 29A. The source of the parts and the absence of a press machine for making cabinets were treated as immaterial because the decisive factor was emergence of a new product. The text also notes that the related penalty and redemption fine were regarded as reasonable in the circumstances.

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Issues: Whether the assembly of parts supplied by others at the appellant's premises amounted to manufacture of excisable goods, and whether the finding of liability and the consequential penalty and fine called for interference.

Analysis: The assembly of different parts was treated as manufacture because it resulted in a new product, namely refrigerating and air-conditioning appliances falling under Central Excise Tariff Item No. 29A. The fact that the parts were supplied by others, or that the appellant did not possess a press machine for making cabinets, was held to be immaterial. The penalty and redemption fine were also found to be reasonable in the circumstances.

Conclusion: The appellant was held to be a manufacturer of the subject goods, and the order imposing penalty and redemption fine was upheld.

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