Manufacture requires a new excisable commodity; processing mineral oil into white oil did not justify Tariff Item 8 classification.

Mere purification and mixing of duty-paid mineral oil with chemicals and earth did not amount to manufacture because excise applies only where processing produces a distinct excisable commodity; the material retained its character and was not classifiable under Tariff Item 8, so the Revenue's classification claim failed. On the appellate issue, once classification was in dispute, the Collector (Appeals) could determine the proper classification directly and was not obliged to remand the matter after rejecting Tariff Item 8, particularly where no separate remand relief was sought. The Revenue's challenge therefore failed on both grounds, leaving the assessee's relief undisturbed.

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Issues: (i) Whether the respondent's processing of duty-paid mineral oil into white oil amounted to manufacture and warranted classification under Tariff Item 8. (ii) Whether the Collector (Appeals) exceeded jurisdiction in not remanding the matter after rejecting classification under Tariff Item 8.

Issue (i): Whether the respondent's processing of duty-paid mineral oil into white oil amounted to manufacture and warranted classification under Tariff Item 8.

Analysis: The processing admitted in the appeal consisted of purification and mixing with chemicals and earth. The ruling relied on the principle that excise is attracted by manufacture of a distinct excisable commodity, not by processing alone, and that a product retaining its character is not brought within the higher levy merely because it is subjected to treatment that may improve or alter its usability.

Conclusion: The process did not constitute manufacture of a product classifiable under Tariff Item 8, and this contention was rejected against the Revenue.

Issue (ii): Whether the Collector (Appeals) exceeded jurisdiction in not remanding the matter after rejecting classification under Tariff Item 8.

Analysis: Once the classification dispute was in appeal, the appellate authority was competent to decide the proper classification and was not bound to remand the matter merely because the original classification was disapproved. The absence of any separate relief seeking remand also supported the appellate disposal.

Conclusion: The Collector (Appeals) acted within jurisdiction, and the Revenue's challenge failed on this ground as well.

Final Conclusion: The Revenue's appeal failed on the substantive classification question and on the challenge to the appellate disposal, leaving the assessee's relief undisturbed.

Ratio Decidendi: Mere processing that does not bring about a new excisable commodity does not amount to manufacture, and an appellate authority deciding classification is not required to remand the matter when it can itself determine the correct classification.

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