Manufacture includes marketability-enhancing purification and filtration, sustaining Modvat credit where the process is incidental to completion of the product.

Purification and filtration carried out to make hydrochloric acid and sulphuric acid marketable can amount to manufacture for excise purposes where the process is incidental or ancillary to completion of the product. A process need not create a chemically different commodity if, in commercial parlance, it produces an identifiable product fit for sale; on that basis, Modvat credit on inputs could not be denied and the assessee's entitlement was sustained.

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Issues: Whether purification and filtration of hydrochloric acid and sulphuric acid, undertaken to make the products marketable, amounted to manufacture so as to entitle the assessee to Modvat credit on inputs.

Analysis: The definition of manufacture includes not only processes directly producing a new commodity but also processes incidental or ancillary to the completion of a manufactured product. The process need not necessarily bring about a chemical change if, in commercial parlance, it is carried out to render the product marketable and results in an identifiable product fit for sale. On the facts, the tribunal's view that the assessee's purification and filtration activity was such an incidental or ancillary process was upheld.

Conclusion: The process amounted to manufacture, and Modvat credit could not be denied to the assessee.

Final Conclusion: The appeal failed, and the assessee's entitlement to Modvat credit was sustained on the footing that the disputed activity fell within manufacture for excise purposes.

Ratio Decidendi: A process carried out to render excisable goods marketable may constitute manufacture if it is incidental or ancillary to completion of the product, even where the process does not effect a chemical change or create a different commodity in a narrow sense.

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