Manufacture and SSI exemption principles clarified for assembled photocopier machines with existing brand name on imported parts.

Assembling imported components with indigenous parts into a finished photocopier in the factory was treated as manufacture because a distinct marketable product emerged from the parts used. SSI exemption could not be denied merely because the imported machines already bore a brand name, where the assessee did not affix any brand name during manufacture and the Revenue failed to prove any disqualification. The departmental appeal therefore failed, and the assessee's entitlement to exemption and immunity from duty demand was upheld.

---

---

Issues: (i) whether assembling imported parts with indigenous parts into photocopier machines amounts to manufacture; (ii) whether SSI exemption is available where the goods bear an existing brand name and the assessee does not affix any brand name during manufacture.

Issue (i): whether assembling imported parts with indigenous parts into photocopier machines amounts to manufacture.

Analysis: The assessee procured indigenous parts, combined them with imported components and assembled photocopier machines in its factory. The activity resulted in emergence of a finished product distinct from the parts used, and was therefore treated as manufacture.

Conclusion: The activity amounted to manufacture.

Issue (ii): whether SSI exemption is available where the goods bear an existing brand name and the assessee does not affix any brand name during manufacture.

Analysis: The imported photocopier machines already bore a brand name, and no brand name was affixed by the assessee in the course of manufacture. The burden to establish disqualification from the exemption was not discharged by the Revenue, and the cited departmental circular supported denial only where the assessee itself used another's brand name.

Conclusion: SSI exemption could not be denied and the assessee remained entitled to the benefit.

Final Conclusion: The departmental appeal failed, the demand was unsustainable, and the assessee's entitlement to exemption and non-liability to duty was upheld.

Ratio Decidendi: Assembly of imported and indigenous parts into a marketable finished product constitutes manufacture, and SSI exemption cannot be denied merely because the imported components already bear a brand name when the assessee does not affix any brand name and the Revenue fails to prove disqualification.

---