Preparation of biris counts as manufacture, justifying excise licensing and rejecting the discrimination challenge.

Rolling tobacco into biris was treated as manufacture under the excise definition because preparation of biris was expressly included for tobacco products; takedars carrying out that process in their premises were therefore manufacturers of excisable goods and had to obtain a Form L-IV licence. The trade notices limiting licensing to clearances above the exempted threshold for unbranded biris were upheld because the licensing control was linked to the duty exemption scheme, and the distinction between in-premises manufacture and work done through home-workers was held to be real and relevant. The challenge to the notices on discrimination failed.

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Issues: (i) Whether takedars engaged in rolling tobacco into biris in their premises were manufacturers of excisable goods and liable to obtain Form L-IV licence under the Central Excise regime; (ii) Whether the trade notices requiring licensing only for clearances above 60 lakhs of biris per year were discriminatory.

Issue (i): Whether takedars engaged in rolling tobacco into biris in their premises were manufacturers of excisable goods and liable to obtain Form L-IV licence under the Central Excise regime.

Analysis: The charging provision levied duty on excisable goods, and the statutory definition of manufacture was inclusive. In relation to tobacco, it specifically included the preparation of biris. The Court treated rolling tobacco into biris as an essential and incidental process in the completion of the manufactured product. Since biris were specifically included in the First Schedule, they were excisable goods, and a person carrying out their preparation was a manufacturer for the purposes of the licensing provisions.

Conclusion: The takedars were manufacturers of excisable goods and were required to obtain Form L-IV licence.

Issue (ii): Whether the trade notices requiring licensing only for clearances above 60 lakhs of biris per year were discriminatory.

Analysis: The exemption notification granted relief from excise duty up to 60 lakhs of unbranded biris in a financial year, and clearances above that limit remained subject to duty. The licensing requirement for persons clearing more than the exempted limit was therefore linked to the statutory scheme of duty and licensing control. The distinction between takedars manufacturing in their own premises and those using home-workers was also treated as a real and substantial one, since the process of manufacture did not take place in the latter's premises.

Conclusion: The trade notices were not discriminatory.

Final Conclusion: The Court upheld the licensing requirement and rejected the challenge to the trade notices, leaving no ground for interference.

Ratio Decidendi: In the case of tobacco products, preparation of biris is manufacture within the statutory definition, and where a classification is tied to an exemption threshold and licensing control under the excise scheme, it is not discriminatory if based on a real and relevant distinction.

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