Excise classification can be disturbed when unsupported by evidence; confectionery scrap dispute remitted for fresh determination.

Excise duty arises only when manufacture produces a new and distinct article with a separate name, character or use; a mere change in raw material is insufficient. Classification findings by excise authorities are ordinarily factual, but writ interference is justified where the conclusion is perverse, based on no evidence, or rests on irrelevant material. On the record, the finding that confectionery scrap remained boiled sweets and was liable as confectionery was unsupported by evidence, so the appellate order was quashed and the matter remitted for fresh hearing and determination. The limitation issue in the demand notices was left open for reconsideration before the authority.

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Issues: Whether the finding that confectionery scrap was classifiable as confectionery under Tariff Item 1A and liable to central excise duty could be sustained when the factual basis for that finding was challenged as perverse, and whether the writ court could interfere and remit the matter for fresh decision.

Analysis: Excise duty is attracted on manufacture of goods, and a mere change in the raw material does not amount to manufacture unless a new and different article emerges with a distinctive name, character or use. Findings of the excise authority on classification are ordinarily factual, but interference is justified where the conclusion is based on no evidence, on irrelevant material, or is such that no reasonable person could reach it. On the materials placed, the conclusion that the scraps remained boiled sweets and were sold as confectionery was not supported by evidence, and the authority had to determine whether the scraps were merely waste or broken parts of the manufactured confectionery. The question of limitation under the demand notices was not decided and was left open for reconsideration before the authority.

Conclusion: The writ court interfered with the appellate order, quashed it, and remitted the matter to the Appellate Collector for fresh hearing and fresh determination in accordance with law.

Ratio Decidendi: A writ court may interfere with an excise classification finding if the finding is perverse or unsupported by evidence, and excise liability depends on whether the article in question is in fact a manufactured product having a distinct commercial identity.

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