Manufacture and Section 35G limits blocked interference where stator processing facts and monetary threshold favored the assessee.

Shaping, varnishing and baking of stators was already recognised as manufacture because the stators became fit for use only after those processes; however, the remaining dispute turned on whether those activities continued in-house after 01.05.1992. On the available record, there was no reliable material to show continued manufacture at the assessee's service centre, and the Tribunal's acceptance of outsourcing to job workers was upheld, so duty could not be sustained on the alleged post-01.05.1992 activity. In an appeal under Section 35G of the Central Excise Act, 1944, factual findings were not open to interference absent perversity or a substantial question of law, and the low monetary value under the governing circular provided an additional reason not to entertain the appeals.

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Issues: (i) Whether the processes of shaping, varnishing and baking of stators, and the alleged post-01.05.1992 activities at the service centre, amounted to manufacture attracting duty under the Central Excise Act, 1944; (ii) Whether the High Court could interfere under Section 35G of the Central Excise Act, 1944 in the absence of sufficient material or a substantial question of law, and in view of the monetary limit applicable to the appeals.

Issue (i): Whether the processes of shaping, varnishing and baking of stators, and the alleged post-01.05.1992 activities at the service centre, amounted to manufacture attracting duty under the Central Excise Act, 1944.

Analysis: The earlier decision of the Supreme Court had already treated the shaping, varnishing and baking of stators as a manufacturing activity because the stators became fit for use only after those processes. The remaining dispute was factual: whether such processes continued at the assessee's premises after 01.05.1992 or had been outsourced to job workers. The adjudication record did not contain reliable material showing continuation of manufacture at the assessee's service centre after that date, and the Tribunal had accepted the outsourcing version on the basis of the available record.

Conclusion: The finding that duty could not be sustained on the alleged in-house post-01.05.1992 activity was upheld, in favour of the assessee.

Issue (ii): Whether the High Court could interfere under Section 35G of the Central Excise Act, 1944 in the absence of sufficient material or a substantial question of law, and in view of the monetary limit applicable to the appeals.

Analysis: The challenge was essentially directed against findings of fact, including the nature and location of the alleged processes on stators. In the absence of perversity or a strong substantial question of law, interference in an appeal under Section 35G was not warranted. Independently, the appeals were also below the monetary threshold prescribed by the governing circular, which furnished an additional reason not to entertain them.

Conclusion: No interference was called for, and the appeals were liable to be rejected.

Final Conclusion: The Department's challenges failed, and the Tribunal's relief to the assessee remained undisturbed.

Ratio Decidendi: In an appeal under Section 35G of the Central Excise Act, 1944, the High Court will not interfere with factual findings unless perversity or a substantial question of law is shown, and a duty appeal below the prescribed monetary threshold may also be declined on that ground.

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