Court rules packing handmade Biri in printed wrappers not 'manufacture' under Central Excise Act

The court held that packing handmade Biri in printed wrappers using a machine does not constitute 'manufacture' under Section 2(f) of the Central Excise Act, 1944. While the revenue argued that packing is incidental to the product's completion, the court disagreed, emphasizing that the Act distinguishes when packing is part of the manufacturing process. As Biri is listed in the First Schedule, not the Third Schedule specifying packing as manufacturing, the court dismissed the appeal, finding no substantial legal question.

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Issues:
Whether packing of 'handmade Biri' in printed plastic wrappers with the aid of a power-operated machine to create 'retail pack' falls under the definition of 'manufacture' as per Section 2(f) of the Central Excise Act, 1944.

Analysis:
The advocate for the revenue argued that packing handmade Biri in pre-printed wrappers using a machine for sale as pouch/sachet is a manufacturing process as it is incidental to the completion of the product. However, the court disagreed, stating that packing cannot be considered incidental or ancillary to manufacturing. The definition of 'manufacture' in Section 2(f) of the Act includes processes incidental to the completion of a product, specified processes in relation to goods, and packing or repacking of goods in certain cases.

The court highlighted that the legislature has specifically included packing or repacking of goods as a manufacturing activity for goods specified in the Third Schedule. As Biri is listed in the First Schedule, the distinction made by the legislature regarding when packing or repacking can be considered part of the manufacturing process is clear. Therefore, the court concluded that since the legislature has made this distinction, there is no basis for interpreting it differently.

In light of the above analysis, the court found no substantial question of law involved in the case and subsequently dismissed the appeal.

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