Manufacture under tariff note requires strict statutory ingredients; mere filling of ammonia into cylinders was not enough for excise liability.

Filling ammonia from bulk tankers into smaller returnable cylinders did not amount to manufacture under Note 10 to Chapter 28 of the Central Excise Tariff Act, 1985. The deeming provision applied only where the statutory conditions of labelling or re-labelling while repacking from bulk packs to retail packs, or some other treatment making the product marketable to the consumer, were strictly satisfied. Here the goods were received in tankers, not bulk packs, and there was no proof of labelling, re-labelling, or any marketability-enhancing treatment. No central excise duty liability could therefore be fastened.

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Issues: Whether transferring ammonia from bulk tankers into smaller returnable cylinders amounts to manufacture under Note 10 to Chapter 28 of the Central Excise Tariff Act, 1985.

Analysis: Note 10 deems certain activities to be manufacture only where the statutory ingredients are strictly satisfied, namely labelling or re-labelling of containers while repacking from bulk packs to retail packs, or any other treatment rendering the product marketable to the consumer. The activity in question was mere filling of ammonia from tankers into smaller cylinders. The goods were received in tankers and not in bulk packs, there was no allegation or proof of labelling or re-labelling by the assessee, and no other treatment to make the product marketable was shown. The circular cited on the meaning of packing also did not assist the department because the essential features of pre-packed commodity and purchaser-independent packaging were absent.

Conclusion: The activity did not amount to manufacture, and no central excise duty liability could be fastened on the assessee.

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