Excise duty is charged on Manufacture.
Normal Meaning of Manufacture
Manufacture implies a change, but every change is not manufacture and yet change of
an article is the result of treatment, labour and manipulation. But something is
necessary and there must be transformation; a new and different article must emerge
having a distinctive name and character or use”.
Delhi Cloth and General Mills, 1977
Burden of proof on department: Burden to prove that an activity/process amounts to
manufacture is on the department.
Examples of processes amounting to manufacture:
(1) Obtaining sugar from sugarcane
(2) Making furniture from woods
(3) Rolling of tobacco to make biris
(4) Conversion of fruit pulp to made fruit drink
(5) Cutting, hemming and stitching of running cloth to make bed sheets, bed spreads and
table cloths
(6) Roasting, salting and spicing of peanuts/cashew-nuts/almonds
(7) Obtaining oil or oil cake from oil seeds (mustard oil or mustard cake from mustard seeds)
(8) Making of wheat flour from wheat
Examples of processes not amounting to manufacture:
(1) Burning in boiler of coal to obtain cinder
(2) Stirring of cream to obtain butter
(3) Upgradation of computer system by increasing the storage capacity
(4) Painting of goods
(5) Cutting of wood into small pieces
(6) Chilling of water
