Manufacture of distinct excisable goods permits fresh duty levy on aluminium circles cut from duty-paid strips, despite same tariff entry.

Central excise duty is leviable on aluminium circles cut from duty-paid strips where the process brings into existence a distinct excisable commodity, even if both products fall under the same tariff item. The controlling principle is that manufacture attracts duty when a commercially separate article emerges, and prior duty on the input does not create immunity from further levy. The argument of impermissible double or repeat taxation was rejected because the statute permits levy at the stage of each distinct excisable product and the same tariff grouping does not bar such duty.

---

---

Issues: Whether central excise duty is leviable on aluminium circles cut from duty-paid strips when both fall under the same tariff item, and whether such levy amounts to impermissible double taxation or repeat taxation.

Analysis: The reference turned on the effect of converting duty-paid strips into circles which are separately named in the tariff. The final opinion followed the Larger Bench view that, once a distinct excisable commodity comes into existence, duty can be levied notwithstanding that the intermediate product was made from duty-paid material and even though the new article falls under the same tariff entry. The decisive principle applied was that manufacture attracts duty at the point a commercially distinct product emerges, and the fact that the same tariff grouping carries the same rate does not create an immunity from levy. The plea of double taxation was rejected in light of the binding larger-bench ruling and the accepted position that multi-stage levy is not barred where the statute so provides.

Conclusion: Duty was held leviable on the aluminium circles, and the assessee's challenge on the ground of double taxation failed.

---