Manufacture test under excise law: repair and reconditioning of old fans did not create a new excisable product.

Repair, reconditioning and servicing of old electric fans, even with packing of components, testing, relabelling and issue of a new guarantee card, did not amount to manufacture under central excise law because those steps did not bring into existence a new and commercially distinct product. Manufacture requires a process that results in a new article with a distinct name, character and use; mere restoration or servicing of old goods does not satisfy that test. On that basis, the duty demand, confiscation and penalty proceedings could not be sustained, and the order dropping the proceedings was preferred over the contrary view.

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Issues: Whether repair, reconditioning and servicing of old electric fans, including packing of components, testing, affixing labels and resale with a new guarantee card, amounted to manufacture under the Central excise law.

Analysis: Manufacture under the statutory definition requires a process that results in completion of a manufactured product and in the emergence of a new and different article having a distinct name, character and use. The finding that mere repair or reconditioning of old and defective fans, even with ancillary steps such as packing, testing, relabelling and issue of a new guarantee card, creates a new excisable product was held to be unsupported by the statutory definition and by the evidence on record. The detailed order dropping the proceedings was preferred, and the contrary order was found to have been passed casually and without proper application of mind.

Conclusion: Repair and reconditioning of old fans did not amount to manufacture, and the duty demand, confiscation and penalty proceedings could not be sustained.

Ratio Decidendi: An activity amounts to manufacture only when it brings into existence a new and commercially distinct product; mere repair, reconditioning or servicing of old goods does not satisfy that test.

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