Re-assembly of dismantled tea chests is not manufacture unless a new article with distinct character emerges.

Re-assembly of dismantled tea chests from plywood panels does not amount to manufacture under Section 2(f) of the Central Excises & Salt Act, 1944 unless the process brings into existence a new and different article with a distinctive name, character or use. The work was treated as re-assembly or repair/reconditioning of the same class of goods, even where worn-out parts were replaced and the work was done through job workers. As no manufacture occurred, the place of performance was immaterial and the excise demand and penalty could not be sustained.

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Issues: Whether re-assembly of dismantled tea chests from plywood panels amounts to manufacture under Section 2(f) of the Central Excises & Salt Act, 1944, so as to attract duty again and sustain the related demand and penalty.

Analysis: Manufacture requires the emergence of a new and different article having a distinctive name, character or use. Applying that test, the re-assembly of used tea chests from dismantled plywood panels, even with replacement of worn-out parts and even if the work is done through job workers, does not bring into existence a new commercial commodity. The process is only re-assembly or repair/reconditioning of the same class of goods. Since no manufacture is involved, the question whether the work was done in the assessee's premises or through contractors becomes immaterial, and the demand based on manufacture cannot stand.

Conclusion: Re-assembly of the tea chests was not manufacture; the duty demand and penalty were unsustainable, and the appeals succeeded in favour of the assessee.

Ratio Decidendi: Re-assembly of dismantled goods is not manufacture unless the process results in a new article with a distinctive name, character or use.

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