Mere labelling of imported goods is not manufacture unless the process converts bulk packs into retail packs.

Mere affixing of labels or stickers on imported goods, without repacking from bulk packs into retail packs or carrying out any further process, does not amount to manufacture under Chapter note 5 to Chapter 30. The governing test is whether the activity goes beyond labelling and results in goods becoming marketable directly to the consumer as retail packs; absent that conversion, manufacture is not made out. On the facts, the goods remained in the same imported condition, so the demand and penalty were unsustainable.

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Issues: Whether merely affixing labels on imported goods, without repacking from bulk packs to retail packs or undertaking any further process, amounts to manufacture under Chapter note 5 to Chapter 30.

Analysis: The goods were only relabelled by affixing stickers carrying statutory particulars, while remaining in the same imported condition. The governing test is whether the process goes beyond mere labelling and amounts to repacking from bulk to retail packs so as to make the goods marketable directly to the consumer. The Tribunal also noted the Supreme Court's view that mere packing or labelling, without evidence of conversion into retail packs, does not by itself constitute manufacture.

Conclusion: Mere labelling of the imported goods, without repacking or any other qualifying process, did not amount to manufacture; the demand and penalty could not be sustained.

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