Mere cutting of imported billets for sale is not manufacture or processing, preserving refund eligibility under the exemption notification.

Mere cutting of imported billets into smaller pieces for local sale does not amount to manufacture or processing when the goods retain their identity and character and no new product emerges. On that basis, the refund under Notification No. 102/2007-C could not be denied for alleged manufacture or processing. The contrary Revenue decisions were treated as distinguishable on facts, and the refund rejection was set aside with consequential relief.

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Issues: Whether cutting imported billets into smaller pieces for local sale amounts to manufacture or processing so as to deny refund under Notification No. 102/2007-C dated 14.09.2007.

Analysis: The imported goods were only cut into smaller sizes for marketing and no new product came into existence. The cutting did not alter the identity or character of the goods. The same principle had been applied in earlier decisions holding that mere reduction in size for trade purposes does not amount to manufacture or processing, and the contrary decisions relied on by the Revenue were found distinguishable on facts.

Conclusion: The condition of the notification was not violated and the refund could not be denied on the ground of manufacture or processing.

Final Conclusion: The rejection of the refund claim was set aside and the appeal was allowed with consequential relief.

Ratio Decidendi: Mere cutting of imported goods into smaller pieces for sale, without bringing about a new product or change in identity, does not constitute manufacture or processing for denial of refund under the exemption notification.

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