Manufacture under excise law requires a process that makes a non-marketable product marketable; flavour blending of ice-cream did not qualify.

Blending marketable ice-cream with flavours to prepare sundaes, shakes and blasts did not amount to manufacture under Note 7 to Chapter 21. The activity only adapted the product to customer preference and did not transform a previously non-marketable product into a marketable one through labelling, re-packing or similar treatment. The demand was therefore not sustainable.

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Issues: Whether blending ice-cream with flavours and serving it as sundaes, shakes and blasts amounted to manufacture under Note 7 to Chapter 21 of the Central Excise Tariff Act, 1985.

Analysis: Note 7 treats as manufacture labeling or re-labeling, re-packing from bulk packs to retail packs, or any other treatment to render the product marketable to the consumer. The ice-cream procured by the appellants from the manufacturer was already in a marketable condition. The appellants only blended flavours and prepared products to suit customer preference. A process that merely enhances marketability does not satisfy the statutory requirement that the product must earlier have lacked marketability and be rendered marketable by the treatment.

Conclusion: The blending activity did not amount to manufacture under Note 7, and the demand was not sustainable.

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