Mere cutting, drilling and assembly of iron materials does not amount to manufacture for duty purposes.

Mere cutting, drilling and simple assembly of iron and steel materials to form stay sets for electric poles does not amount to manufacture where no commercially different product emerges. On that basis, the processed goods were not chargeable to duty, and the activity was treated as outside the manufacturing definition for duty purposes. The assessee therefore succeeded, with the impugned order set aside and consequential relief granted.

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Issues: Whether stay sets made by cutting, drilling and assembling iron and steel products into a shape for holding electric poles amount to manufacture and are liable to duty.

Analysis: The activity consisted only of cutting the raw materials to size, drilling holes and joining the pieces to the required shape. Such processing did not bring into existence goods different from the raw material and did not amount to manufacture. As the activity was not manufacturing in nature, the resultant stay sets were not chargeable to duty.

Conclusion: The issue was answered in favour of the assessee. The stay sets were held not liable to duty.

Final Conclusion: The impugned order was set aside and the appeal was allowed with consequential relief.

Ratio Decidendi: Mere cutting, drilling and simple assembly of iron and steel materials, without emergence of a commercially different product, does not constitute manufacture for duty purposes.

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