Formaldehyde in factory tanks treated as finished goods, with container filling not amounting to manufacture for duty exemption.

Formaldehyde kept in factory storage tanks was treated as fully manufactured goods ready for despatch, even though it had not yet been filled into carboys, drums or other customer containers. The packing of the finished product into such containers was not regarded as a manufacturing process; the accepted factory practice was to store the product in tanks and package it only at the time of clearance. On that basis, the stored formaldehyde was considered eligible for duty exemption.

---

---

Issues: Whether formaldehyde stored in factory tanks, though not filled into carboys, drums or other customer containers, was to be treated as fully manufactured goods ready for despatch and exempt from duty.

Analysis: The storage practice in formaldehyde factories was accepted as the normal mode of keeping finished product in tanks and filling it into customer containers only at the time of clearance. The packing of the product into carboys or drums was not treated as a manufacturing process, and the product in the storage tank was regarded as fully manufactured and ready for despatch.

Conclusion: The stored formaldehyde was held eligible for exemption from duty, and the appeal succeeded.

---