The term manufacture explained.
The term manufacture is defined under section 2(f) of the Central
Excise Act, 1944. Manufacture involves bringing into existence a
new substance having different name, character or use. As the duty
is on goods, manufacture must be of goods. In order to be goods,
the product should be marketable, i.e. the product should be known
in the market as such and should be capable of being brought and
sold in the market. It does not mean that the sale of the goods
is a precondition for charging duty. Goods which have capability
of being bought and sold in the market, will attract Central Excise
duty even if they are not marketed and may be consumed captively.
In addition there are certain processes, which are defined as amounting
to manufacture. Such processes are specified in the Chapter notes
and section notes in the First Schedule to the Central Excise Tariff
Act, 1985. There is duty liability in respect of these specified
processes even if they may not result in the emergence of a new
and distinctive commodity.