Insulation of copper and aluminium strips is not manufacture unless it creates a commercially distinct article.

Mere insulation of bare copper and aluminium strips with glass-fibre, paper, cloth or enamel does not amount to manufacture unless the process brings into existence a commercially distinct article with a new identity. The insulation only improved the utility of the existing strips as conductors and did not alter their basic commercial character. As the goods remained copper or aluminium strips in substance, they were not assessable under the residuary tariff item. Insulated copper strips fell under Tariff Item 26A(2) and insulated aluminium strips under Tariff Item 27(b), and resort to Tariff Item 68 was rejected.

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Issues: Whether insulation of bare copper and aluminium strips with glass-fibre, paper, cloth or enamel amounted to manufacture of a new and distinct article so as to make the products assessable under the residuary tariff item, instead of under the specific tariff entries for copper and aluminium strips.

Analysis: The essential test for manufacture is whether processing brings into existence a commercially distinct article with a new identity, and mere treatment or special processing does not necessarily satisfy that test. The insulation process here only improved the utility of the existing strips as conductors and did not change their basic commercial identity. The fact that the insulated goods were known by a different description in trade, or that the department had later relied on a tariff advice, did not justify shifting them to the residuary entry when the goods continued to remain copper or aluminium strips in substance.

Conclusion: The products were not classifiable under the residuary tariff item; insulated copper strips fell under Tariff Item 26A(2) and insulated aluminium strips under Tariff Item 27(b). The finding that the process amounted to manufacture attracting Tariff Item 68 was rejected.

Final Conclusion: The assessment orders and appellate order were set aside, and the petition succeeded with a declaration that the products were chargeable under the specific tariff items applicable to copper or aluminium strips, as the case may be, rather than the residuary item.

Ratio Decidendi: Mere insulation or other special processing of a commodity does not amount to manufacture unless it results in a commercially distinct article having a different identity in law and trade.

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