Aluminium alloy powder treated as a distinct excisable product, with further processing held to amount to manufacture.

Aluminium nickel powder made by further processing aluminium alloy ingots was not treated as aluminium in any crude form for Tariff Item 27(a)(i), because the crude-form description did not extend to a later-stage, commercially distinct powder. The exemption notification was therefore unavailable. The court also held that breaking ingots into lumps and pulverising them into powder was not a mere size reduction but a manufacturing process that produced a distinct marketable commodity. Tariff Item 68, as the residuary entry, was correctly applied, and duty was payable on the manufacture of the powder.

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Issues: (i) Whether aluminium nickel powder manufactured from aluminium alloy ingots is aluminium in any crude form and hence falls under Tariff Item No. 27(a)(i) with the benefit of the exemption notification; (ii) Whether the process of breaking ingots into lumps and pulverising them into powder amounts to manufacture attracting Tariff Item No. 68.

Issue (i): Whether aluminium nickel powder manufactured from aluminium alloy ingots is aluminium in any crude form and hence falls under Tariff Item No. 27(a)(i) with the benefit of the exemption notification.

Analysis: Tariff Item No. 27(a)(i) treats aluminium in crude form, including ingots, as dutiable under the specified entry, and Explanation II extends the description of aluminium to alloys in which aluminium predominates by weight. The ingots were themselves treated as aluminium in crude form at the initial stage of manufacture. However, once those ingots were further processed into powder, the article became a different commercial product and could not be stretched within the artificial definition of crude form. The exemption notification applied only to manufacture of aluminium in crude form at the initial stage and not to a later-stage product obtained after further processing of the ingots.

Conclusion: The powder was not aluminium in any crude form and the exemption was unavailable; the finding was against the assessee.

Issue (ii): Whether the process of breaking ingots into lumps and pulverising them into powder amounts to manufacture attracting Tariff Item No. 68.

Analysis: The process was not a mere reduction in size. The ingots were broken into lumps and then put through a jaw-crusher to produce aluminium nickel powder, resulting in a distinct marketable commodity. The existence of a different article at the end of the process supported the conclusion that manufacture had taken place. Tariff Item No. 68, being the residuary entry, was therefore correctly applied.

Conclusion: The process amounted to manufacture and duty was payable under Tariff Item No. 68; the finding was against the assessee.

Final Conclusion: The writ petition failed because the impugned orders correctly treated aluminium nickel powder as outside Tariff Item No. 27(a)(i) and rightly subjected its manufacture to duty under the residuary entry.

Ratio Decidendi: A later-stage product obtained by further processing of aluminium alloy ingots into a commercially distinct powder cannot be treated as aluminium in crude form, and a process that brings such a distinct article into existence amounts to manufacture for excise purposes.

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