Mere dilution of an excisable product does not create a new commodity or trigger fresh duty liability.

Dilution of an excisable insecticide from higher concentration to a lower one did not amount to manufacture because the product retained its name, character and use. The mere reduction in concentration did not create a new commodity known to the market with a different identity, so no fresh excise duty liability arose. A Board circular relied on by the Revenue was treated as unhelpful because it had already been quashed by High Courts.

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Issues: Whether dilution of Altherin from 90% concentration to 3.6% concentration amounted to manufacture of a new excisable commodity liable to duty again.

Analysis: The product after dilution remained the same insecticide, with its name, character and use continuing unchanged. The mere reduction in concentration did not bring into existence a new commodity known to the market with a different identity. The Board circular relied upon by the Revenue was also of no assistance, having already been quashed by High Courts.

Conclusion: Dilution did not amount to manufacture and no fresh duty liability arose. The appeal was rejected.

Ratio Decidendi: Mere dilution of an excisable product, without a change in its name, character or use, does not constitute manufacture of a new dutiable commodity.

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