Manufacture of tobacco powder turned on process and tariff classification, not an exemption notification, so duty was not attracted.

Crushing tobacco leaves, stems, stalks and butts into tobacco powder was not treated as manufacture merely because an exemption notification was issued. The Tribunal followed its earlier view in the assessees' own case and a related decision, holding that the notification did not by itself alter the classification or determine the manufacturing question. Manufacture continued to depend on the nature of the process and the relevant tariff position of the inputs and end product, so the Revenue's contention that the powder became dutiable was rejected.

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Issues: Whether crushing of tobacco leaves, stems, stalks and butts into tobacco powder amounted to manufacture so as to attract duty, and whether the exemption notification issued by the Central Government altered the earlier view that the product fell under the nil-rated tariff entry.

Analysis: The Tribunal followed its earlier view in the appellants' own case and in the related decision relied upon therein, holding that the notification did not by itself determine the question of manufacture. The issue of manufacture remained dependent on the nature of the process and the relevant tariff classification of the inputs and resulting product, and the later notification was not sufficient to displace the earlier reasoning.

Conclusion: Crushing tobacco leaves, stems, stalks and butts into tobacco powder did not warrant reversal of the earlier classification view, and the product was not treated as dutiable on the basis urged by the Revenue.

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