Mere cutting of imported jumbo rolls is not manufacture when no new excisable product emerges

Mere cutting and slitting of imported jumbo rolls of graphic art films into smaller widths and lengths does not amount to manufacture unless a new and distinct product emerges. The existence of separate tariff entries for rolls and flats does not by itself convert a size-reduction process into manufacture, because tariff classification operates only where a manufactured commodity results. On the stated facts, the activity was confined to cutting the jumbo rolls into smaller flats and plates without producing a different excisable product, so a Central Excise licence was not required.

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Issues: Whether the process of cutting and slitting imported jumbo rolls of graphic art films into smaller widths and lengths, including flats, amounts to manufacture so as to require a Central Excise licence.

Analysis: Manufacture requires a process that brings into existence a new and distinct product; a mere change or reduction in size is not enough. The Board's own earlier clarification had stated that slitting and cutting duty-paid imported jumbo rolls into required widths and lengths would not amount to manufacture. The separate tariff entries for rolls and flats do not by themselves convert a process of mere cutting from one form into another into manufacture, because tariff entries apply only where a manufactured product results. On the facts, the petitioner only cut jumbo rolls into smaller flats and plates without producing a new commodity.

Conclusion: The process did not amount to manufacture and the direction to take out a Central Excise licence was unsustainable.

Final Conclusion: The writ petition succeeded because the petitioner's activity was confined to size reduction of jumbo rolls and did not result in a new and different excisable product.

Ratio Decidendi: Mere cutting or slitting of imported jumbo rolls into smaller sizes or flats, without emergence of a distinct and different commodity, does not constitute manufacture for excise purposes.

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