Deeming manufacture under tariff chapter notes requires actual bulk-to-retail repacking; mere smaller packing does not attract excise duty.

Repacking edible oil received in tankers into smaller containers was not treated as manufacture under the relevant tariff chapter note because the statutory deeming fiction applies only where repacking from bulk to retail packs, or equivalent conditions, is actually satisfied. On the facts found, the goods were received in tankers and the activity did not meet that threshold. The Tribunal followed prior binding and persuasive authorities on the construction of the chapter note and held that mere packing into smaller containers, without fulfilment of the statutory conditions, does not amount to manufacture. The excise demand therefore failed and was set aside in favour of the assessee.

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Issues: Whether repacking of edible oil received in tankers into smaller packs amounts to manufacture and attracts central excise duty.

Analysis: The Tribunal held that the issue stood covered by earlier binding and persuasive decisions, including the interpretation of the relevant chapter notes creating a deeming fiction of manufacture only where repacking from bulk to retail packs, or equivalent treatment, is actually undertaken. On the facts found, the oil was received in tankers and the activity did not amount to repacking from bulk packs to retail packs within the meaning of the tariff chapter note. The Tribunal followed the settled construction that mere packing into smaller containers, without satisfaction of the statutory conditions, does not constitute manufacture.

Conclusion: The activity was not manufacture and the demand could not be sustained; the appeal was allowed in favour of the assessee.

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