Assembly of computer parts held not to be manufacture where monitors and printers remain peripheral components.

Buying computer parts from the market and assembling or installing them together does not, by itself, amount to manufacture of a computer system under central excise law. Earlier Tribunal decisions and Supreme Court rulings were treated as settling that supplying monitors and printers with other parts does not convert the activity into manufacture, particularly where no enabling provision treats such assembly as a taxable manufacturing process and the items are only peripheral components. On that basis, the Revenue's appeals failed and the activity was held not to constitute manufacture.

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Issues: Whether buying various computer parts and installing them together amounts to manufacture of a computer system.

Analysis: The issue was treated as settled by earlier Tribunal decisions and by Supreme Court rulings holding that monitors and printers purchased from the market and supplied with other computer parts do not, by themselves, render the activity manufacture of a computer system. The order under challenge proceeded on the same footing, namely that there were no enabling provisions in central excise law to treat such assembly and installation as manufacture and that monitors and printers were peripheral items, not essential components of a computer.

Conclusion: The activity did not amount to manufacture of a computer system, and the Revenue's appeals failed.

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