Commercially distinct blended oil amounts to manufacture and attracts excise duty; limitation plea also failed.

Blending two oils by an electric process, which reduced viscosity and produced a commercially distinct product sold under a different name and brand, amounted to manufacture because the activity transformed the inputs into a new, marketable excisable goods. The demand was also found to be within limitation on the facts. The High Court upheld the authorities' orders and held the assessee liable to excise duty on the finished product.

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Issues: (i) Whether blending two oils and reducing viscosity by an electric process amounted to manufacture of a distinct excisable product; (ii) Whether the demand was barred by limitation.

Issue (i): Whether blending two oils and reducing viscosity by an electric process amounted to manufacture of a distinct excisable product.

Analysis: The process involved two raw materials, mechanical blending by electric motor, reduction of viscosity, and sale of the finished product under a different name and brand. The resulting goods were treated as a new, marketable product used for industrial purposes. On these facts, the process was not a mere mixing of two existing products but brought about transformation into goods different from the inputs.

Conclusion: The process constituted manufacture and the finished product was exigible to duty.

Issue (ii): Whether the demand was barred by limitation.

Analysis: The demand was found to have been raised within time and the plea of limitation was rejected on the facts of the case.

Conclusion: The demand was not time-barred.

Final Conclusion: The appeal failed, the orders of the authorities below were upheld, and the assessee remained liable on the basis that the activity amounted to manufacture.

Ratio Decidendi: Where a blending process produces a commercially distinct and marketable product with a different name, use, and character, the activity amounts to manufacture for excise purposes.

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