S.K. Jha, C.J. -- Petitioner No.1, a partnership firm of Indore, carries on the business of packaging of duty paid tea and the tea for such packaging which is received by it, has already undergone the process of manufacture, e.g. withering, rolling, fermentation and firing, etc. The duty paid tea, received from its customers, is packed in packages of 25 grams to 1 kg. and then sold by it. Petitioner No.2 is a partner of the firm, petitioner No. 1.

2. According to the petitioners, it was insisted that before the petitioners could carryon the business of such packaging of the duty paid tea, they must obtain Central Excise licence and so under duress and compulsion, in order to carryon the business, the petitioners had to take a licence under the Central Excise and Salt Act, 1944 (hereinafter referred to as the Act).

3. The sole question for determination in this petition is as to whether the package or packet in which the duty paid tea is sold to the consumers, is liable to payment of excise duty under tariff item No.3 of the schedule to the Act. There is a slight modification in this regard which is of no practical consequence. Under the Central Excise and Salt Act 1944, as it originally stood, the duty had to be levied and collected at the rates set forth in the first schedule, whereas the duty leviable after the Central Excise Tariff Act 1985 came into force, had to be levied and collected at the rates set forth in the schedule to the Central Excise Tariff Act, 1985. For all practical purposes, however, the first schedule mentioned before the Central Excise Tariff Act 1985 came into force, is the same as the schedule to the Central Excise Tariff Act 1985 in so far as tea is concerned. This difference, therefore, in the two statutes, has no bearing upon the question at hand.

4. Excise duty is a duty payable u/s 3 of the Act. Section 3(1) is the charging section. All other provisions in the Act deal with the assessment and collection of excise duty and are clearly in the nature of machinery provisions. A reference to the relevant part of section 3, therefore, needs to be reproduced. The relevant part of section 3 (1) of the Act runs thus:

" Duties specified in the First Schedule to be levied:

(1) There shall be levied and collected in such manner as may be prescribed duties of excise on all excisable goods other than salt which an: produced or manufactured in India and a duty on salt manufactured in, or imported by land into, and part of India as and at the rates, set forth in the First Schedule. "

It will thus be seen that in order to be exigible to excise duty, an article must be an excisable goods which are produced or manufactured in India. (Underlining is ours for the sake of emphasis). This brings us to the definition of the term 'excisable goods.' Section 2 (d) of the Act lays down that 'excisable goods' means goods specified in the first Schedule as being subject to a duty of excise and includes salt. Excisable goods are thus specified in the first schedule, but such excisable goods must be produced or manufactured in India. An excise duty is, therefore, a duty on production or manufacture of excisable goods. Goods are something which can ordinarily come to the market to be brought and sold and is known to the market as such. 'Manufacture' has been defined in section 2 (1) as including any process incidental or ancillary to the completion of a manufactured product which is specified in relation to any goods in the section or chapter notes to the schedule to the Central Excise Tariff Act 1985, as amounting to manufacture, the last part having been so included after the 1985 Act came into force with effect from 28.2.1986.

5. The word 'manufacture' implies such a change that the raw material is transformed into a new and different article so emerged has to have a distinct name. The essence of manufacture is the transformation of the parts or basic components into another article of different character and the completion of