Segregation by manual washing is not manufacture where no new product emerges, so central excise duty cannot be levied.

Manual washing and segregation of off-grade high carbon ferro chrome from ferro-chrome slag was held not to amount to manufacture because the process merely removed extraneous material without bringing into existence a new product with a distinct name, character or use. Applying earlier Tribunal principles on removal of foreign matter and gangue from ores, the activity was treated as simple separation rather than commercial transformation, so central excise duty was not leviable.

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Issues: Whether the segregation of Off-grade High Carbon Ferro Chrome from Ferro-Chrome Slag through manual washing amounts to manufacture for levy of central excise duty.

Analysis: The process undertaken only removes extraneous and unwanted material from the slag by washing and separation, without bringing into existence a new product with a distinct name, character or use. The earlier Tribunal decisions on removal of foreign matter or gangue from ore and similar segregation processes were applied to hold that such activity does not transform the material into a different commercial commodity and is not manufacture.

Conclusion: The activity does not amount to manufacture and central excise duty is not leviable.

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