Mere cutting and slitting does not amount to manufacture where no new commercially distinct commodity emerges.

Mere cutting and slitting of jumbo rolls into smaller pads did not amount to manufacture because the process did not change the product's essential character or bring into existence a new commercially distinct commodity. The goods remained the same scouring or scrub pads, with only size altered. Earlier acceptance of classification did not bar the assessee from contesting the manufacture issue again, so the challenge was maintainable. Authorities where a different commercial product emerged were distinguished. The revenue challenge therefore failed and the assessee succeeded.

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Issues: Whether cutting and slitting jumbo rolls of Scrotch Brite into smaller pads amounts to manufacture, and whether the assessee was barred from contesting the issue after earlier acceptance of classification.

Analysis: The earlier acceptance of classification did not prevent the assessee from raising the question of manufacture again. On the merits, the process undertaken was only cutting and slitting of the same material into smaller sizes, without any change in its essential character. The product continued to remain the same scouring pad or scrub pad, and no new commercially distinct commodity emerged. Decisions treating mere change in length, size or shape as insufficient to constitute manufacture were found applicable, while authorities dealing with processes that produced a different commercial product were distinguished.

Conclusion: The process did not amount to manufacture, and the assessee was entitled to challenge the issue. The assessee succeeded, and the revenue challenge failed.

Ratio Decidendi: Mere cutting or slitting of an existing product into smaller sizes, without emergence of a new commodity having a different character, name or use, does not amount to manufacture.

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