Manufacture test for blown grade bitumen: oxidation of straight grade bitumen did not create a new excisable product on these facts.

Conversion of straight grade bitumen into blown grade bitumen by the oxidation or blowing process was treated as not amounting to manufacture on the facts considered, because no new commercial commodity with a new name, character or use emerged. The analysis also notes that Board circulars consistently regarded straight grade and blown grade bitumen as varieties of bitumen, with tariff classification depending on packing mode. As blown grade bitumen produced from duty-paid straight grade bitumen fell within that circular-based treatment, excise duty was not chargeable in the circumstances covered.

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Issues: Whether conversion of straight grade bitumen into blown grade bitumen by the oxidation or blowing process amounted to manufacture, and whether blown grade bitumen produced from duty-paid straight grade bitumen was liable to excise duty.

Analysis: The Board's circulars consistently treated straight grade bitumen and blown grade bitumen as varieties of bitumen, and the classification under the Central Excise Tariff Act, 1985 depended on the mode of packing. The Tribunal's finding that no new commercial commodity with a new name, character or use came into existence by the blowing process was accepted, and the revenue could not take a stand contrary to its own circulars. The earlier contrary view was distinguished because the relevant circulars had not been placed before the Tribunal in that case.

Conclusion: Conversion of straight grade bitumen into blown grade bitumen did not amount to manufacture on the facts considered, and duty was not chargeable where the blown grade bitumen was produced from duty-paid straight grade bitumen in the manner covered by the Board's circulars.

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