Manufacture test for processed mirrors and glass: no new commercial commodity arose, so duty demand failed.

Bevelling, edge polishing, sand blasting and acid frosting on duty-paid mirrors and glass were examined against the settled test of manufacture. The processes did not amount to manufacture for mirrors because the article remained a mirror, retained its identity and use, and was not known by a different commercial name. Although processed glass may, on different facts, emerge as worked glass under another tariff heading, the Revenue failed to show that these processes created a new commodity with a separate name, character and use. The duty demand therefore could not be sustained on the basis that manufacture had occurred.

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Issues: Whether bevelling, edge polishing, sand blasting and acid frosting carried out on duty-paid mirrors and glass amounts to manufacture.

Analysis: The processes were held not to amount to manufacture in relation to mirrors because the processed article continued to remain a mirror, retained the same identity and use, and was not known by a different commercial name. As to glass, it was found that where the processed product became known as worked glass and fell under a different tariff heading, the factual position differed; however, on the facts of the appeal, the Revenue had not established that the impugned processes brought into existence a new commodity so as to satisfy the settled test of manufacture. The governing principle applied was that manufacture arises only when a distinct commercial commodity, with a separate name, character and use, comes into existence, and the original commodity ceases to exist in its earlier form.

Conclusion: The impugned processes did not amount to manufacture in the facts of the appeal, and the Revenue's challenge failed.

Final Conclusion: The demand of duty could not be sustained on the footing that the processes undertaken resulted in manufacture.

Ratio Decidendi: A process amounts to manufacture only if it brings into existence a distinct commercial commodity with a different name, character and use, and the original commodity no longer retains its earlier identity.

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