Manufacture under excise law requires emergence of a new marketable commodity; site assembly of a refrigeration plant did not qualify.

Assembly and installation of a refrigeration plant at a customer's premises from duty-paid bought-out items did not amount to manufacture under central excise law because no new marketable commodity emerged. The Tribunal followed its earlier decision on identical facts and held that, without a manufacturing process, the demand for duty could not be sustained. The consequential penalties and confiscation also failed with the duty demand, and the adjudication order was set aside in full.

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Issues: Whether erection and installation of refrigeration plants at the customer's premises amounted to manufacture of excisable goods so as to sustain the demand of duty, penalties and confiscation.

Analysis: The Tribunal followed its earlier decision on identical facts and held that the refrigeration plant was constructed by using bought-out items which had already suffered excise duty. Such construction at site did not bring into existence a new marketable commodity within the meaning of the excise law. Since no manufacturing process was established, the basis for duty demand and the consequential penal and confiscatory action could not survive.

Conclusion: The issue was decided in favour of the assessee. The demand of duty and the penalties and confiscation ordered by the Commissioner were not sustainable.

Final Conclusion: The appeals succeeded and the adjudication order was set aside in its entirety.

Ratio Decidendi: Assembly and installation of a refrigeration plant from duty-paid bought-out items at site, without emergence of a new marketable commodity, does not amount to manufacture for central excise purposes.

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