Labelling on imported chocolate cartons was held prima facie not to amount to manufacture absent packing or repacking with relabelling.

Affixing mandatory package-declaration stickers on imported chocolate cartons, showing the importer's name and address, maximum retail price, net weight and month of importation, was treated as prima facie compliance with the Weights and Measures packaging rules rather than manufacture. The Tribunal noted that mere fixing of stickers on cartons does not, by itself, amount to labelling or relabelling; manufacture under the Chapter 18 and 19 notes arises only where packing or repacking is combined with labelling or relabelling. On that interim view, the duty demand was not shown sustainable, so waiver of pre-deposit was granted and recovery stayed.

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Issues: Whether affixing labels on imported chocolate cartons, as required by the package commodities rules, amounted to labelling or relabelling of containers so as to constitute manufacture under Note 3 to Chapter 18 and Note 3 to Chapter 19 of the Central Excise Tariff Act, 1985, and justify pre-deposit of duty and penalties.

Analysis: The Tribunal noted that the importer had affixed only the particulars required by the Standards of Weights and Measures (Package Commodities) Rules, 1977, including the name and address of the importer, maximum retail price, net weight, and month of importation. A Trade Notice based on the Board's view indicated that merely fixing stickers on cartons does not amount to labelling, and an earlier Tribunal decision had held that manufacture on this footing would arise only where the conditions in the chapter notes are satisfied, namely packing or repacking together with labelling or relabelling. On that prima facie view, the department's demand was not shown to be sustainable at the interim stage.

Conclusion: The applicants were entitled to waiver of deposit of the duty and penalties, and recovery thereof was stayed.

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