Packing of tea after duty payment was not manufacture where packaged tea was not a separate excisable commodity.

Packing of tea at a factory after receipt under Rule 173H of the Central Excise Rules, 1944 was not treated as manufacture for excise purposes because the tea had already suffered duty when received as unpacked tea, and packaged tea was not a separate excisable commodity during the relevant period from 1-3-1999. On that factual and legal basis, the packing activity did not create a new dutiable product and no excise duty or cess was attracted. The issue was decided in favour of the assessee, and the Revenue's appeal failed.

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Issues: Whether the packing of tea at the Sholayar factory, after receipt under Rule 173H of the Central Excise Rules, 1944, amounted to manufacture so as to attract excise duty and cess, when packaged tea was not a separate excisable commodity during the relevant period.

Analysis: The tea was received from sister units for packing after the duty had already been paid on the unpacked tea. The decisive finding, not challenged in appeal, was that from 1-3-1999 packaged tea was not a separate excisable commodity. In that situation, the packing activity at the respondent's factory did not create a new dutiable product or amount to manufacture for excise purposes.

Conclusion: The issue was answered in favour of the assessee and the Revenue's appeal failed.

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