Manufacture under excise law: dyeing and heat setting of non-woven fabrics created a distinct commodity and attracted duty.

Dyeing and heat setting of non-woven fabrics was treated as manufacture under section 2(f) because the processing produced a commercially different commodity with a distinct name, character and use. The Tribunal found that the fabric was known differently in commercial parlance before and after processing, and held that duty remained payable even though the goods continued under the same tariff heading. It also rejected the plea of double taxation, stating that different commodities at different stages may validly attract separate levy. On that basis, the department's appeal was allowed.

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Issues: Whether dyeing and heat setting of non-woven fabrics amounted to manufacture so as to attract excise duty, and whether duty could again be levied after the goods had already discharged duty at the bonding stage.

Analysis: The Tribunal applied the settled test of manufacture under section 2(f) and relied on the principle that a process results in manufacture when it brings into existence a commercially different commodity having a distinct name, character or use. The Tribunal noted that dyeing and heat setting altered the fabric and that the goods before and after processing were known differently in commercial parlance. It further held that the goods remained liable to duty notwithstanding that they continued to fall under the same tariff heading, and rejected the plea of double taxation on the ground that different commodities at different stages can attract levy.

Conclusion: Dyeing and heat setting of the non-woven fabrics amounted to manufacture and the appeal by the department was allowed.

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