Re-rubberisation of worn-out rims is not manufacture when no commercially distinct product emerges under excise law.

Re-rubberisation of worn-out rubberised M.S. rims was treated as a process of reworking, not manufacture, because it did not bring into existence a commercially distinct product under Section 2(f). Applying the Supreme Court ratio on re-rubberising and re-lining old rollers, the activity was held outside central excise liability. As a result, excise duty was not leviable on the process, and any duty already paid was stated to be refundable. The Revenue's challenge therefore failed on the manufacture question.

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Issues: Whether re-rubberisation of old and worn out rubberised M.S. rims amounts to manufacture within the meaning of Section 2(f) of the Central Excises and Salt Act.

Analysis: The issue was governed by the Supreme Court's ruling that re-rubberising and re-lining of old and used rollers does not amount to manufacture for central excise purposes. Applying that ratio, the same process carried out on worn out rubberised M.S. rims was treated as a like activity and not a new manufacture. Since the process did not bring into existence a commercially distinct product, excise duty was not leviable. Duty already paid, where any, was held refundable.

Conclusion: Re-rubberisation of worn out rubberised M.S. rims is not manufacture under Section 2(f), and the assessee is not liable to pay the demanded duty.

Final Conclusion: The duty demand failed and the assessee obtained relief, while the Revenue's challenge was rejected.

Ratio Decidendi: Reprocessing of worn out goods by re-rubberisation does not amount to manufacture unless a new commercially distinct product emerges.

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