Manufacture test for job-work processing fails where intermediate goods do not acquire the character of finished excisable products.

Bending, welding, buffing and hard anodizing of SS laser cut sheets on job work did not amount to manufacture where the intermediate product was returned to the principal manufacturer for further processing and had not acquired the essential character of the final excisable goods. On the facts found, the statutory test of manufacture under Section 2(f) of the Central Excise Act, 1944 was not met, so the intermediate product was not exigible to central excise duty and the duty demand was unsustainable.

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Issues: Whether the processes of bending, welding, buffing and hard anodizing undertaken on SS laser cut sheets amounted to manufacture so as to attract central excise duty on the intermediate product.

Analysis: The processes were carried out on goods sent by the principal manufacturer for job work. The intermediate product was returned to the principal manufacturer for further processing before the finished excisable goods emerged. On the record, there was no specific evidence to support the view that the intermediate product itself had acquired the essential character of the final excisable goods so as to be exigible to duty. In these circumstances, the definition of manufacture under Section 2(f) of the Central Excise Act, 1944 was not satisfied on the facts found.

Conclusion: The processes did not amount to manufacture of a new excisable product, and the duty demand on the intermediate product was unsustainable.

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