Per V.K. Agrawal :

In this appeal, filed by M/s. Godrej Hi Care Ltd., the issue is whether the process of making mosquito repellant mats with the help of diluted insecticides, amounts to manufacture.

2. Shri Rangan, learned Counsel for the appellants submitted that the appellants manufacture Mosquito repellant mats in the form of mats made of paper boards; that to manufacture the mosquito repellant mats, concentrated technical grade insecticide is diluted with solvents, the diluted insecticides material is poured over the mat, the insecticides, the solvents and the paper board have all suffered excise duty and are purchased from market and this cannot be subjected to further excise duty; that pouring of diluted insecticides on to the mats does not amount to manufacture as this process is carried out for the purpose of convenience of the consumers who use the mats; that no new product emerges as a result of process undertaken by the appellants. He has relied upon the decision in the case of CCE vs. Markfed Agro Chemicals reported in 1993 (68) ELT 848 (T)where in the Tribunal held that processing of concentrated basic pesticidal chemicals carried out through addition of inert carriers/solvent and dispersing and stabilizing agents resulting in their dilution does not amount to manufacture as no new product having distinctive name, character and use emerges. He has also relied upon the decision in the case of Sandoz India Ltd. vs. UOI reported in 1980 (6) ELT 696 (Bom.)., wherein it is held that change in physical form does not amount to manufacture.

3. Countering the arguments, Shri C. Mani, learned JDR submitted that by pouring diluted insecticides on mats, the character of the mats undergoes change as it makes paper mats into mosquito repellant mats; that the entire process amounts to manufacture as a new distinct commodity with different name, character and use emerges.

4. We have considered the submissions made by both the sides. Central Excise duty is on the goods manufactured/produced in India. As per the decision of the Hon'ble Supreme Court in the case of UOI vs. Delhi Cloth and General Mills Co. Ltd. Others Mills reported in 1977 ELT J-199, manufacture takes place when a distinct commodity with a different name, character or use emerges as a result of the process undertaken by the manufacturer. In the present case, the appellants are bringing paper mats. They are undertaking the process of diluting insecticides and pouring it on the mats and as a consequence of this process, the paper mat is converted into mosquito repellant mats and are marketed as such. There is no force in the submission of the learned Counsel that a new product having a different name, character or use has not emerged as a result of the process undertaken by them. It has been held by the Hon'ble Supreme Court in the case of Empire Industries Ltd vs. UOI Ors. reported in 1985 (20) ELT 179 that the process may be simple or-cumbersome which is immaterial, what is material is whether a new product has emerged as a result of the process undertaken by the assessee. In view of this, we hold that the process undertaken by the assessee in the present case, amounts to manufacture,and Central Excise duty is chargeable. The appeal is rejected.