Manufacture test in excise: electroplating and lacquering on imitation jewellery do not create a new commercial product.

Electroplating, gold plating and lacquering on imitation jewellery supplied for job work do not amount to manufacture under section 2(f) of the Central Excise Act, 1944 unless the process brings into existence a new and distinct commercial commodity. The Tribunal applied the settled test of emergence of a new product and treated mere ornamentation or coating as insufficient to create a separate marketable identity. On that basis, the plated jewellery remained the same article of jewellery, and the substantive issue was resolved against the Revenue.

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Issues: Whether electroplating, gold plating and lacquering carried out on imitation jewellery amounts to manufacture.

Analysis: The process undertaken was only gold plating and lacquering on imitation jewellery supplied for job work. The Tribunal applied the settled test of manufacture under section 2(f) of the Central Excise Act, 1944 and examined whether the process resulted in emergence of a new commercial commodity. It distinguished mere ornamentation from a manufacturing process and relied on the principle that plating or coating does not by itself amount to manufacture unless a distinct product with a new identity emerges.

Conclusion: The process did not amount to manufacture, and the plated jewellery remained jewellery without emergence of a new product.

Final Conclusion: The impugned order was set aside and the appeal was allowed with consequential relief, leaving the Revenue successful on the substantive issue.

Ratio Decidendi: A process of electroplating or ornamentation on an existing article does not constitute manufacture unless it brings into existence a new and distinct commercial commodity.

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