Manufacture by repacking and relabelling, with extended limitation upheld for suppression of material facts.

Repacking, filtering and relabelling bulk materials into smaller retail packs may amount to manufacture where the tariff note treats such treatment as rendering the product marketable, and the resulting goods emerge as a distinct commercial commodity. On the facts described, the products were marketed under different names for cleansing use, so they were correctly classified under heading 3402.90 rather than the original headings of the raw materials. The extended period of limitation was also held invocable because the assessee did not fully disclose the nature of the activity, the new product descriptions or their market identity, and the record indicated suppression and incomplete disclosure of material facts.

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Issues: (i) Whether filtering, repacking and relabelling of the materials supplied to the assessee amounted to manufacture and attracted classification under heading 3402.90; (ii) Whether the extended period of limitation was invocable on the facts of the case.

Issue (i): Whether filtering, repacking and relabelling of the materials supplied to the assessee amounted to manufacture and attracted classification under heading 3402.90.

Analysis: The products emerged in a distinct commercial form, were marketed under different names and for specific cleansing purposes, and were no longer the same goods as the bulk materials supplied to the assessee. Chapter Note 6 to Chapter 34 of the Central Excise Tariff Act treated packing or repacking into smaller packs, including bulk-to-retail packing or any other treatment rendering the product marketable to the consumer, as manufacture. The goods therefore answered the description of cleaning preparations under heading 3402.90 and not the original tariff headings of the raw materials.

Conclusion: The activity amounted to manufacture and the goods were rightly classified under heading 3402.90, against the assessee.

Issue (ii): Whether the extended period of limitation was invocable on the facts of the case.

Analysis: The assessee's letter did not disclose the full nature of the activity, the new names given to the products, or their actual application and market identity. The record also showed awareness of excise liability and a deliberate attempt to avoid it by altering the description on cartons. These facts supported suppression and non-disclosure sufficient to invoke the extended limitation period.

Conclusion: The extended period of limitation was validly invoked, against the assessee.

Final Conclusion: The demand of duty, interest and penalty was sustained and the appeals were dismissed.

Ratio Decidendi: Repacking and relabelling of bulk goods into marketable retail packs can amount to manufacture where a tariff note so provides and the resulting product is a distinct commercial commodity; suppression or incomplete disclosure of material facts justifies invocation of the extended period of limitation.

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