Mere sieving of reprocessed dextrose powder is not manufacture when no new product with distinct character emerges.

Sieving anhydrous dextrose powder to remove moisture-induced lumps after return for re-processing under Rule 173-H did not amount to manufacture because the goods received back and the goods cleared remained the same in composition. The process did not create a new product or any article with a distinct name, character or use, so no central excise duty could be levied on the reprocessed powder. The earlier view that reprocessing without a change in essential characteristics is not manufacture was applied, and the duty demand was therefore unsustainable.

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Issues: Whether sieving and removal of moisture from anhydrous dextrose powder, received back for re-processing under Rule 173-H, amounted to manufacture so as to attract central excise duty on the cleared dextrose powder.

Analysis: The goods received back and the goods cleared were found to be the same in composition. The only process undertaken was sieving to remove lumps caused by absorption of moisture. That process did not bring into existence a new product or any commodity having a distinct name, character or use. Clearance of the reprocessed goods was protected by Rule 173-H, and the earlier view that reprocessing without change in characteristics does not amount to manufacture was applied.

Conclusion: The process did not amount to manufacture and the duty demand was not sustainable; the finding of the lower appellate authority was upheld in favour of the assessee.

Ratio Decidendi: Mere sieving or similar reprocessing that does not produce a new and different article with a distinct name, character or use does not amount to manufacture for excise purposes.

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