Deemed manufacture under excise law requires proof of statutory processing on goods, not mere resale or transport packing.

Deemed manufacture under Section 2(f)(iii) of the Central Excise Act requires proof that the goods themselves underwent a statutory process such as packing or repacking, labelling or relabelling, alteration of retail sale price, testing, or another treatment that improves marketability. On the facts stated, the spare parts were received and cleared in original packing, with extra cartons or crates used only for safe transportation, and the record did not show physical alteration of MRP, repacking from bulk to retail packs, or relabelling in the statutory sense. Mere resale at a higher price and a supplier label were insufficient, so the charge of manufacture was not established.

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Issues: Whether the respondent's activities in relation to traded spare parts, namely packing or repacking, labelling or relabelling, alteration of retail sale price, testing, or other treatment to improve marketability, amounted to manufacture under Section 2(f)(iii) of the Central Excise Act, 1944.

Analysis: The Revenue's case rested on allegations that spare parts were procured, stored, packed in wooden crates or cartons, supplied under stickers bearing the respondent's name, and sold at prices higher than the original MRP. The record, however, did not show any physical alteration of the MRP or retail sale price on the unit containers, any repacking from bulk to retail packs, or any relabelling of the goods in the statutory sense. The goods were found to be received and cleared in their original packing and labelling, with additional packing used only for safe transportation. The evidence also did not establish testing by the respondent or any other process that rendered otherwise non-marketable goods marketable. Mere purchase and resale at a higher price, or the use of a label stating "supplied by" the respondent, did not by itself establish deemed manufacture.

Conclusion: The alleged activities did not constitute manufacture under Section 2(f)(iii) of the Central Excise Act, 1944, and the Revenue failed to prove the charge with concrete evidence.

Ratio Decidendi: Deemed manufacture under Section 2(f)(iii) requires proof of the specific statutory process on the goods themselves, and mere logistical packing, resale at a higher price, or a supplier label does not amount to manufacture absent evidence of statutory alteration or repacking in the prescribed sense.

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