Manufacture test for pigment paste may be raised on appeal and remanded for fresh excisability review.

A plea going to the root of excisability may be raised at the appellate stage as an additional ground where it involves a mixed question of law and fact and no finding was recorded by the original authority. Here, the original adjudication addressed clubbing of clearances but did not decide whether pigment paste amounted to manufactured excisable goods. The matter therefore required fresh examination of whether the process produced a new commodity known to the market with a distinct name, character and use within the statutory definition of manufacture. The assessee was entitled to raise the issue, and remand for de novo adjudication was appropriate.

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Issues: Whether the assessee could be permitted to raise, at the appellate stage, the question whether pigment paste amounted to manufactured excisable goods, and whether the matter required remand for fresh consideration under the definition of manufacture.

Analysis: The original adjudication proceeded on clubbing of clearances and did not decide the basic question of manufacture or excisability of pigment paste. A plea going to the root of the dispute may be entertained as an additional ground, particularly where it involves a mixed question of law and fact and is material to the liability in dispute. The record also showed that the issue of manufacture had been raised before the original authority, but no finding had been recorded on it. The proper course was therefore to examine afresh whether the process resulted in a new commodity known to the market with a distinct name, character and use, within the scope of the statutory definition of manufacture.

Conclusion: The assessee was entitled to raise the issue, and the matter was rightly remanded for de novo adjudication on whether the product fell within manufacture under the relevant statutory definition.

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