Mere cleaning, cutting and grading of block mica for sale does not amount to manufacture under excise law.

Mica mined in lump form does not become a manufactured product merely because it is cleaned, cut to size and graded for sale. The governing principle is that manufacture under section 2(f) requires a process that brings into existence a new and distinct product with a different identity, character or marketable substance. Processing done only to make the goods marketable is insufficient. On that basis, block mica subjected only to marketing preparation was not liable to central excise duty as manufactured goods, although fabricated mica may stand on a different footing where actual fabrication or punching amounts to manufacture.

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Issues: Whether mica mined in lump form, after cleaning, cutting to size and grading for sale, becomes a manufactured product liable to central excise duty under Item 68 of the Central Excise Tariff.

Analysis: Liability under section 3 of the Central Excises and Salt Act, 1944 arises only when excisable goods are produced or manufactured. The statutory definition of manufacture in section 2(f) includes only those processes that are incidental or ancillary to the completion of a manufactured product. Mica in lump form, though subjected to cleaning, cutting and grading for marketing, does not thereby acquire a new identity, character or marketable substance distinct from the mined mica. Such treatment is only for making the goods marketable and does not amount to manufacture. Fabricated mica stands on a different footing because fabrication or punching may involve a manufacturing process.

Conclusion: Treatment of block mica for marketing did not amount to manufacture and it was not liable to central excise duty on that basis; the revision application was allowed to that extent.

Ratio Decidendi: Mere cleaning, cutting, grading or similar treatment undertaken only to make an article marketable does not constitute manufacture unless a new and distinct product comes into existence.

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