The process of bonding two kraft papers together with bitumin does not amount to manufacture, and the resulting bituminised water-proof paper is not liable to excise duty under Tariff Item 17 (2) of the Central Excises and Salt Act, 1944.

( 1 ) A common question arises in this Writ Appeal and the writ petition, viz. , whether bituminised water proof paper produced by the petitioners is liable to excise duty under Tariff Item 17 (2) of the Central Excises and Salt Act, 1944. Bituminised water-proof paper is prepared by coating one side of the kraft paper with bitumin, to make it more durable and strong for the purpose of packaging. Sometimes, two kraft paper are bonded together with bitumin. It is admitted that the kraft paper used for the purpose, has already suffered duty, and so has the bitumin used for the purpose. The question is, whether the bituminised waterproof paper produced by the petitioners is a new commodity, and liable to duty afresh ? In other words, the question is whether the process employed for preparing bituminised water-proof paper, involves manufacture ? It is the common case of both the parties before us that, unless the process employed by the petitioners amounts to manufacture no duty is leviable. It may be noticed that the kraft paper used for the purpose, is used only for wrapping or packaging. The process employed for preparing this paper is stated in the counter-affidavit in the following words :-". . . . . one roll of the kraft paper is passed on to another one on the roller of a machine and while the roll of kraft paper is being passed on, bitumin which is kept in a tank and heated by electrical application, is applied as bonding material to the paper in the roll at the lower surface. After the paper to which the bitumin is applied reaches the second roller, another roll of kraft paper is passed on and both the rolls of kraft paper which are bonded by bitumin come out of the machine as bituminised water-proof paper. . . . . "according to the respondents, this process is a process of manufacture, while according to the petitioners, it is not.

( 2 ) THE first question is : what does manufacture mean ? The definition contained in the Act is not helpful in explaining the meaning or content of the word. Reference may be had to the oft-cited decision of the Supreme Court in Union of India v. Delhi Cloth and General Mills - AIR 1963 S. C. 791 = 1977 E. L. T. (J 199), in this behalf. This is what the Supreme Court said :- "the word manufacture used as a verb is generally understood to means "bringing into existence a new substance" and does not mean merely "to produce some change in a substance", however minor in consequence the change may be. This distinction is well brought about in a passage thus quoted in Permanent Edition of Words and Phrases, Vol. 26, from an American judgment. The passage runs thus - "manufacture implies is a change, but every change is not manufacture and yet every change of an article is the result of treatment, labour and manipulation. But something more is necessary and there must be transformation; a new and different article must emerge having a distinctive name, character, or use". Applying the said test, let us see whether the process employed by the petitioners can be said to amount to manufacture. . . We think not. What all happens is that, a kraft paper which is used only for the purpose of packaging, is bonded with another kraft paper by employing bitumin as a bonding agent. Take a case where a person in his hut or room adopts the same process. He takes two kraft paper sheets, boils the bitumin to the required degree, and pastes them together with bitumin. Can it be said that there is a manufacture ? Merely because the same thing is done on a larger scale by using electric energy or by employing a mechanical gadget, or machine, it should make no difference. Even the bituminised water-proof paper so obtained is used for the very same purpose, viz. , wrapping and packaging. It is only with a view to make it more strong and durable that two kraft papers are bonded together with bitumin. We, therefore, agree with the petitioners that the process employed by them does not amount to a manufac