FRP body fitment on duty-paid chassis is not manufacture; no further excise duty arises on body building activity.

Fitment of an FRP body kit on a duty-paid chassis did not amount to manufacture because the chassis remained identifiable as a motor vehicle and no new, distinct commodity came into existence. Applying the common parlance and market identity test, the activity was treated as body building on an existing chassis rather than manufacture of a motor vehicle. As the FRP body components were already separately duty-paid before fitment, no further excise duty was payable on the activity.

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Issues: Whether fitting an FRP body kit on a duty-paid chassis amounts to manufacture of a motor vehicle so as to attract excise duty.

Analysis: The chassis received by the respondents were already duty paid and remained identifiable as motor vehicles even after the body fitment. The body-building activity did not bring into existence a new and distinct commodity and the respondents were separately paying duty on the FRP body components before fitment. Applying the settled common parlance and market identity approach, the activity was only body building on a chassis and not manufacture of a motor vehicle.

Conclusion: The fitment of FRP body kits on duty-paid chassis did not amount to manufacture, and no further excise duty was payable on that activity.

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