Textile process as manufacture requires a lasting fabric change; pleating and embossing failed that test, so the challenge failed.

Pleating and embossing of duty-paid processed fabrics did not amount to manufacture under Chapter Note 4 of Chapter 54 because the process did not produce a lasting or reasonable permanent change in the fabric. The analysis applied prior decisions construing "any other process" to require a permanent change, and held that a merely temporary process is insufficient. On the facts proved, the Board circular and trade notice did not alter that conclusion, so the Revenue's challenge failed and the duty demand and consequential penal liabilities were not restored.

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Issues: Whether pleating and embossing of duty-paid processed fabrics amounted to manufacture under Chapter Note 4 of Chapter 54 of the Central Excise Tariff Act, 1985.

Analysis: The appeal turned on whether the process gave the fabric a lasting change so as to fall within the extended meaning of manufacture. The earlier decisions relied upon by the parties, including the Supreme Court's construction of "any other process", were followed to hold that only processes resulting in a reasonable permanent change in the processed fabric can amount to manufacture. In the absence of evidence that pleating and embossing produced such a permanent change, the Board circular and trade notice did not displace the contrary factual and legal conclusion reached below.

Conclusion: Pleating and embossing did not amount to manufacture on the facts proved, and the Revenue's challenge failed.

Final Conclusion: The demand of duty, along with consequential penal liabilities, was not restored and the appeal was dismissed.

Ratio Decidendi: A textile process amounts to manufacture only if it imparts a lasting or permanent change to the fabric; a merely temporary process does not.

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