Manufacture by assembly and fixation of curtain wall panels, with extended limitation barred by bona fide doubt on duty liability.

Assembling and fixing aluminium glass curtain wall panels can amount to manufacture where the process brings into existence a distinct commercial product with a new name, character or use; the appellant was treated as the manufacturer because it undertook the work with its own tools and contractual arrangements beyond mere labour supply, even though another agency applied sealant. A demand beyond the normal limitation period could not rely on the extended period where there was bona fide doubt on manufacture and no clear suppression. Consequential penalties could not survive, while confiscation remained possible with reduced redemption fine.

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Issues: (i) Whether the activity of assembling and fixing aluminium glass curtain wall panels amounted to manufacture and, if so, who was the manufacturer; (ii) Whether the demand was barred by limitation; (iii) Whether penalties and confiscation-related relief were sustainable.

Issue (i): Whether the activity of assembling and fixing aluminium glass curtain wall panels amounted to manufacture and, if so, who was the manufacturer.

Analysis: The process resulted in a distinct commercial product, namely aluminium glass panels, satisfying the settled test that manufacture requires emergence of a new and different article having a distinct name, character or use. The contract terms showed that the appellant undertook the work with its own tools and tackles and under arrangements that went beyond mere labour supply. The fact that sealant application was done by another agency did not alter the character of the appellant's role in bringing the product into existence.

Conclusion: The activity amounted to manufacture and the appellant was the manufacturer.

Issue (ii): Whether the demand was barred by limitation.

Analysis: The demand covered a period more than one year prior to the show cause notice. The record showed room for doubt on whether the activity amounted to manufacture, and the appellant had a bona fide belief that no duty was payable. In such circumstances, the extended period could not be invoked.

Conclusion: The demand was time-barred.

Issue (iii): Whether penalties and confiscation-related relief were sustainable.

Analysis: Once the demand itself failed on limitation, the penalties could not survive. The seized goods were nevertheless liable to confiscation, but the redemption fine required reduction in the interests of justice.

Conclusion: Penalties were not sustainable and the redemption fine was reduced.

Final Conclusion: The appeals succeeded to the extent that the duty demand and penalties were set aside, while confiscation was maintained with a substantially reduced redemption fine.

Ratio Decidendi: Where a distinct excisable product emerges from a process of assembly and fixing, the activity amounts to manufacture; however, if the demand is raised beyond the normal limitation period in the absence of suppression and in the presence of bona fide doubt, the extended period cannot be invoked and consequential penalties fail.

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