Binding circulars and lack of marketability meant reshelling rollers was not manufacture for excise purposes.

Reshelling rollers used in sugar mills was treated as not amounting to manufacture under the Central Excise Act because the adjudicating authority had followed a binding Board circular, and departmental officers could not take a contrary view without supersession of that circular. The alleged shell was also found to be only an intermediate product, not separately ordered or sold, and no material was produced to show commercial marketability. The analysis further noted the relevance of Notification No. 275/88-C.E. and the Board circular dated 1-7-1996. The departmental appeal was rejected and the assessee's position was upheld.

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Issues: Whether the process of reshelling rollers used in sugar mills amounts to manufacture under the Central Excise Act, and whether the departmental appeal could succeed in the face of the Board circular and the absence of material showing commercial marketability of the shell.

Analysis: The activity was held not to amount to manufacture because the adjudicating authority had followed the Board circular, and departmental authorities could not take a contrary stand without first superseding that circular. The reasoning also relied on the view that the shell was only an intermediate product, not separately ordered or sold as a marketable commodity, and that no material had been produced to establish commercial marketability. The decision further noted the relevance of exemption under Notification No. 275/88-C.E. and the Board circular dated 1-7-1996.

Conclusion: The process of reshelling rollers did not amount to manufacture, and the departmental appeal was rejected.

Final Conclusion: The impugned order was sustained and the assessee's position was upheld.

Ratio Decidendi: Where a binding Board circular supports the assessee's treatment of the activity, and the alleged product is only an intermediate, non-marketable item, the process does not constitute manufacture for excise purposes.

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