Physical change in old rubber processing does not amount to manufacture where no distinct commercial product emerges.

Crushing old rubber into crumb rubber powder was treated as a mere change in physical form, not a process that created a new commodity with a distinct commercial or chemical identity. The note applies the principle that manufacture requires emergence of a commercially different product, and that tariff classification alone cannot establish duty liability. It also records that earlier binding decisions in the assessee's own case had already held the powder was obtained only by crushing, with no new product emerging. On that reasoning, the process was held not to amount to manufacture and duty could not be sustained without proof of manufacture.

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Issues: Whether crushing old rubber into crumb rubber powder amounts to manufacture and whether the resultant product is classifiable and dutiable as a new excisable commodity.

Analysis: The dispute turned on whether the process of cutting, sieving, crushing and converting old rubber into powder brought about a transformation resulting in a new commodity with distinct commercial or chemical identity. The earlier binding decisions in the assessee's own case had already held that the powdered product was obtained by a mere process of crushing and that no new product emerged. The reasoning also applied the principle that a mere change in physical form, without a chemical change or emergence of a commercially different product, does not constitute manufacture. The burden remained on the Revenue to establish manufacture, and tariff classification by itself could not displace that burden.

Conclusion: Crushing old rubber into crumb rubber powder does not amount to manufacture, and the Revenue's challenge to the Commissioner (Appeals)' order fails.

Ratio Decidendi: A process that only alters the physical form of rubber without producing a commercially or chemically distinct product does not amount to manufacture, and duty cannot be sustained unless the Revenue proves that manufacture has occurred.

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