1993 (9) TMI 192 - AT - Central Excise

Summary

Issues Involved:
The judgment involves determining whether the preparation of specific pesticidal chemicals through dilution with inert carriers and agents amounts to "manufacture" under Section 2(f) of the Central Excises and Salts Act, 1944.

Comprehensive Details:
The appeal questioned whether the dilution process of basic pesticidal chemicals with carriers and agents to create new products suitable for use constitutes manufacture under Section 2(f) of the Act. The appellant argued that this process results in the emergence of distinct products with different properties, akin to the manufacture of soft drinks from concentrates. On the contrary, the respondent contended that the dilution did not create new articles with distinctive characteristics, as the products were marketed under the same names as the basic chemicals used.

The Tribunal examined the submissions and records to determine if the dilution process transformed the basic pesticidal chemicals into new products with unique identities. Citing precedents, the Tribunal noted that a mere change in form does not necessarily indicate the manufacture of a new article. It emphasized that for excise duty to apply, the processing must lead to the creation of a new and distinct commodity commercially recognized as such. In this case, the processing by the respondents did not result in the emergence of products with distinctive names, characters, or uses, as they retained the names of the basic chemicals even after dilution.

Based on the analysis and legal principles from previous judgments, the Tribunal concluded that the processes carried out by the respondents did not amount to "manufacture" as defined in Section 2(f) of the Act. Since the dilution did not lead to the creation of new products with unique identities, the appeal was rejected.