Body building on duty-paid chassis is manufacture when it yields a finished bus within the relevant tariff heading.

Body building on duty-paid chassis constituted manufacture under Chapter 87 because the finished buses fell within Heading 87.02 and emerged as new, usable products. The contention that mere fabrication of bodies did not amount to manufacture was rejected, and central excise liability was upheld. The impugned order was left undisturbed, and the appeals failed.

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Issues: Whether the appellant's body building activity on duty paid chassis amounted to manufacture under Chapter 87 of the Central Excise Tariff Act, 1985.

Analysis: The dispute turned on the structure of Chapter 87 and the coverage of Heading 87.02. The finished buses produced by the appellant were held to fall within the tariff entry, and the process was treated as resulting in a new and usable product. On that basis, the contention that mere fabrication of bodies did not amount to manufacture was rejected.

Conclusion: The activity constituted manufacture and the challenge to excise liability failed.

Final Conclusion: The impugned order was left undisturbed and the appeals did not succeed.

Ratio Decidendi: Where body building on duty paid chassis produces a finished motor vehicle falling within the relevant tariff heading, the activity amounts to manufacture for central excise purposes.

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