Reeling and rewinding of thread is not manufacture where no further process is shown and tariff notes do not deem it so.

Reeling and rewinding of purchased thread was held not to amount to manufacture for tariff purposes because the appellate authority found no process beyond reeling and rewinding, the Revenue produced no evidence of any additional manufacturing activity, and no Chapter 55 note treated that process as manufacture. On that basis, the tariff demand could not be sustained and the Revenue's appeal failed.

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Issues: Whether the process of reeling and rewinding of purchased thread amounts to manufacture so as to attract duty under the tariff classification relied upon by the Revenue.

Analysis: The appellate authority had recorded a specific finding that reeling and rewinding did not amount to manufacture. The Revenue did not produce evidence to show that the respondents carried out any process beyond reeling and rewinding. In the absence of any chapter note in Chapter 55 treating such process as manufacture, there was no basis to disturb the finding.

Conclusion: The process of reeling and rewinding does not amount to manufacture, and the Revenue's appeal fails.

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