Duty-paid chocolate repacking with dry fruits was not manufacture; no new dutiable commodity arose.

Adding dry fruits and flavouring to duty-paid chocolate blocks and repacking them into consumer packs did not amount to manufacture of a new dutiable commodity. The process was treated as a change in presentation rather than the creation of a distinct product exigible to duty again. The tariff entries were considered alongside the analogous structure noted in Prabhat Sound Studios and applied on a pari materia basis, leading to the conclusion that no fresh manufacture arose after duty had already been paid on the chocolate blocks. The further duty demand was therefore not sustainable.

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Issues: Whether adding dry fruits and flavouring to duty-paid chocolate blocks and repacking them into consumer packs amounts to manufacture resulting in a new dutiable commodity.

Analysis: The dispute turned on whether the process adopted by the assessee merely altered the presentation of duty-paid chocolate or brought into existence a distinct product exigible to duty again. The adjudicating authority had examined the nature of chocolate making and held that no fresh manufacture emerged after duty-paid chocolate in block form was processed further. The tariff description relied upon by Revenue was considered alongside the analogous tariff structure noticed by the Supreme Court in Prabhat Sound Studios, and the entries were treated as pari materia for the purpose of applying the same principle.

Conclusion: The addition of dry fruits to duty-paid chocolate blocks did not amount to manufacture of a new commodity, and the further duty demand was not sustainable.

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