Manufacture test for coal briquettes: mere mixing and reshaping of coal dust did not create a new excisable commodity.

Conversion of coal dust mixed with molasses into briquettes did not amount to manufacture because the process did not create a product with a distinct name, character or use. Coal powder was only mixed with a binding agent, pressed and dried to make fuel briquettes for easier use; this changed form and shape, but not the essential character or commercial identity of coal. Mere processing, blending or reshaping is insufficient to constitute manufacture unless a new commercially distinct commodity emerges. The conclusion was that no new excisable product came into existence, so the assessee succeeded.

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Issues: Whether conversion of coal dust mixed with molasses into coal briquettes amounts to manufacture and results in emergence of a new excisable commodity.

Analysis: The determining test applied was whether the process brought into existence a product having a distinct name, character and use from the original material. The coal powder was merely mixed with molasses as a binding agent, pressed and dried to obtain briquettes for more convenient use as fuel. The process did not alter the essential character or commercial identity of coal, and the change was only in form and shape. On the same principle, mere processing, blending or change in shape does not constitute manufacture unless a new commercially distinct product emerges.

Conclusion: Conversion of coal dust into coal briquettes did not amount to manufacture, and no new commodity emerged; the appeal was therefore allowed in favour of the assessee.

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