Manufacture by Assembly requires a new commercially identifiable product with distinct function, not mere joining of components.

Assembly of duty-paid and bought-out components amounts to manufacture only where the process produces a new commercially identifiable product with a distinct market identity and function. On the facts discussed, the cylinder block piston assembly was not shown to be a separate excisable product, because the evidence did not establish that the assembled set could perform a function different from its individual parts. The cited precedents on manufacture were treated as fact-specific and distinguishable. The commentary concludes that, without a new marketable product emerging from the assembly, no excise duty is payable and related demand and penalties are unsustainable.

---

---

Issues: Whether the cylinder block piston assembly (CBPA) assembled from duty-paid and bought-out components amounted to manufacture of a new excisable product.

Analysis: The assembling of the components did not bring into existence a commercially distinct product with a separate market identity. The materials placed before the Tribunal did not establish that the assembled set, in the absence of the missing component, could perform a function different from that of the individual parts. The evidence relied upon by the department did not support the conclusion that a new marketable product had emerged, and the cited precedents on manufacture were distinguishable on their facts.

Conclusion: The process did not amount to manufacture, and no further duty was payable; the demand and penalties were unsustainable.

Ratio Decidendi: Assembly of bought-out components amounts to manufacture only if it results in a new commercially identifiable product capable of performing a distinct function from the individual parts.

---