Manufacture under Central Excise law covers incidental processes on chassis and body-built vehicles, supporting stay relief.

Activities undertaken on imported motor vehicle chassis and on body-built vehicles were examined for whether they amounted to manufacture under Section 2(f) of the Central Excise Act, 1944. The text states that the chassis were processed as required under the Motor Vehicles Rules and then sent to job workers for body building on duty-paid goods, with duty paid at clearance after reversal of credit. Applying the settled test that a process incidental or ancillary to completion of a marketable or commercially distinct product can constitute manufacture, the Tribunal found a prima facie case for the applicants and granted waiver of pre-deposit and stay of recovery pending appeal.

---

---

Issues: Whether the activities undertaken on imported motor vehicle chassis and after receipt of body-built vehicles amounted to manufacture for the purpose of denying credit and whether the applicants were entitled to waiver of pre-deposit and stay of recovery.

Analysis: The process undertaken on the chassis was required under the Motor Vehicles Rules and the chassis were thereafter sent to job workers for body building on duty-paid goods. The definition of manufacture under Section 2(f) of the Central Excise Act, 1944 includes processes incidental or ancillary to the completion of a manufactured product. Applying the settled test that a process integral to bringing the goods to a marketable or commercially distinct stage can fall within manufacture, the Tribunal found a prima facie case in favour of the applicants. It also noted that duty was being paid at the stage of clearance of the motor vehicles after reversal of credit.

Conclusion: The applicants were entitled to waiver of pre-deposit and stay of recovery pending the appeal; the stay petition was allowed.

---