Manufacture requires a new commercially distinct product; winding yarn on bare wire was not manufacture and attracted no excise duty

Covering bare copper or aluminium electric wire with cotton or fibre-glass yarn did not amount to manufacture because the process did not change the wire's sectional area or produce a new commercially recognised article with a different name, character, or use. On the facts found by the appellate authority and affirmed by the Tribunal, the revenue failed to show any transformation into a distinct product. The process therefore was not manufacture, and no excise duty was payable on the wound wire.

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Issues: Whether winding cotton or fibre-glass yarn on bare copper or aluminium electric wire amounted to manufacture bringing into existence a new commercially recognised product liable to excise duty.

Analysis: The assessee merely received bare electric wire and covered it with cotton or fibre-glass yarn without altering its sectional area. The excise authorities led no evidence to show that this process produced a new commercially recognised article or that the covered wire acquired a different name, character, or use. On the facts found by the appellate authority and affirmed by the Tribunal, the process did not amount to manufacture.

Conclusion: The process was not manufacture and no excise duty was payable on the wound wire; the finding in favour of the assessee was /justified.

Ratio Decidendi: A process carried out on an excisable article does not amount to manufacture unless it results in a new and commercially distinct product; the burden lies on the revenue to establish that transformation.

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