Definition of Manufacture

As per Section 2 (f)

Manufacture includes any process,

(i) incidental or ancillary to the completion of a manufactured product;

(ii) which is specified in relation to any goods in the Section or Chapter Notes of the Schedule to the Central Excise Tariff Act, 1985 as amounting to manufacture;


(iii) which, in relation to goods specified in the Third Schedule of Central Excise Act, involves packing or repacking

     of such goods in a unit container or labelling or re-labelling of containers including the  declaration or alteration of retail  sale price on it

     or adoption of any other treatment on the  goods to render the product marketable to consumer

      and the term manufacturer shall be construed accordingly and shall include not only a person  who employs hired labour in the production or manufacture of excisable goods,        but also any  person who engages in their production or manufacture on his own account



An inclusive definition of Manufacture is given in Section 2(f)

It states that apart from the general meaning of manufacture, it also includes the certain other things, like

  1. Any incidental process to manufacture

       Example :If Scrap produced during manufacture of Final product, duty may be applicable on

                     scrap also 

  1. Any Process specified in CETA as manufacture

        Examples of Such processes which are treated as Deemed Manufacture

  • Galvanization of iron and steel
  • Recording of sound on audio or video tapes/CDs
  • Process of cutting, slitting and printing of aluminum foils
  1. For Goods specified in Third Schedule of CEA

        (those goods whose MRP to be declared),

        Activities like labelling or re-labelling of containers including the declaration or alteration of

        retail sale price


Activities covered in 2 and 3 above are called Deemed Manufacture

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CA Maninder Singh

CA Maninder Singh is a Chartered Accountant for the past 14 years. He also provides Accounts Tax GST Training in Delhi, Kerala and online.