Manufacture test for duty-paid wrist watches: logo reprinting and strap changes did not create a new excisable product.

Reprinting customers' logos on duty-paid wrist watches and changing the strap did not amount to manufacture because the process did not bring into existence a new article with a different name, character or use. The essential identity of the goods remained that of wrist watches, and mere intermixing or incidental replacement of parts was insufficient to create a commercially distinct product. The Tribunal applied the settled manufacture test and held that excise duty could not be demanded again on the altered watches.

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Issues: Whether reprinting customers' logos on duty-paid wrist watches and changing the strap amounts to manufacture of new wrist watches so as to attract excise duty again.

Analysis: The duty-paid watches were received back and only the dial was reprinted with the customer's name and, in some cases, the strap was changed. No process brought into existence a new product with a different name, character or use. The possibility of intermixing of parts did not by itself convert the activity into manufacture, because the essential identity of the article remained that of a wrist watch. The Tribunal distinguished the authorities relied on by the Revenue and applied the settled principle that manufacture requires emergence of a distinct article.

Conclusion: The activity did not amount to manufacture and the duty demand was not sustainable, in favour of the assessee.

Ratio Decidendi: Mere reprinting of a customer's name on a duty-paid product and incidental replacement of parts does not constitute manufacture unless a commercially distinct article with a different name, character or use emerges.

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