Packing duty-paid tea is not manufacture; the container is not separately excisable under the charging provision or tariff entry.

Packing duty-paid tea into containers or packets does not amount to manufacture because it does not transform the finished tea into a new and distinct commercial article. Excise duty under Section 3 of the Central Excises and Salt Act, 1944 applies only to goods that are manufactured, and incidental packing is not enough unless it is integral to creating a new product. Item No. 3 of the First Schedule, including package tea, was read as taxing the tea content rather than the container or packing material. A packet or container by itself is not commercially known as tea and is not separately excisable.

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Issues: Whether the packing of duty-paid tea into containers or packets amounts to manufacture or renders the packet/container liable to excise duty under Section 3 of the Central Excises and Salt Act, 1944 and Item No. 3 of the First Schedule.

Analysis: Excise duty under Section 3 is attracted only to excisable goods produced or manufactured in India. Manufacture requires a transformation resulting in a new and distinct article, and incidental or ancillary processes must be integral to that manufacture. Packing duty-paid tea into containers does not bring into existence any new article; it merely places the finished tea in a convenient form for sale. The description of tea in Item No. 3, including package tea, shows that the levy is on the tea content and not on the container or packing material. A package or container is not commercially known as tea and cannot be treated as an excisable good by itself.

Conclusion: Packing or packaging of duty-paid tea does not amount to manufacture, and the packet or container is not liable to excise duty under the charging provision or Item No. 3.

Ratio Decidendi: Excise duty is leviable only on goods that are manufactured, and mere packing of a finished excisable commodity does not constitute manufacture unless the packing process itself is an integral part of bringing into existence a new commercial article.

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