Printing on paper and paperboard is not manufacture where the base material's essential character remains unchanged.

Mere printing on paper, paperboard and corrugated materials does not constitute manufacture unless it results in a commercially distinct product with a new name, character or use. Tariff classification under a heading is not conclusive of manufacture, and the department must show from the chapter notes or other material that the process creates a new excisable commodity. As printing left the basic identity and essential character of the base material unchanged, excise duty, interest and penalties were not sustainable. The appeals were allowed and the duty demand with penalties was set aside with consequential relief.

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Issues: Whether the activity of printing on paper, paperboard and corrugated materials amounts to manufacture and consequently attracts excise duty, interest and penalties.

Analysis: The duty demand was founded on the premise that printing transformed the received goods into finished products and that their tariff classification under the relevant headings itself established manufacture. The Tribunal held that classification under a tariff entry is not ative of manufacture and that the department had not shown, from the chapter notes or otherwise, that the printing process created a commercially new and different commodity. It followed the settled principle that manufacture requires a transformation resulting in a new article with distinct name, character or use, and that mere printing, without change in the basic identity or essential character of the underlying paper or paperboard, does not satisfy that test. The relied upon decisions on printing of paper, paperboard, glass bottles and similar goods supported the view that such process remains incidental and does not convert the base material into a new excisable product.

Conclusion: The activity of printing did not amount to manufacture. The demand of excise duty, interest and penalties could not be sustained and the assessee succeeded.

Final Conclusion: The appeals were allowed and the impugned duty demand and penalties were set aside with consequential relief.

Ratio Decidendi: Mere printing on already manufactured paper or paperboard, without emergence of a commercially distinct product or alteration of its essential character, does not constitute manufacture under excise law, and tariff classification by itself cannot create duty liability.

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