Labelling alone is not manufacture where imported goods remain in retail packs and no qualifying repacking occurs.

Affixing stickers on imported chocolates and medicaments did not amount to manufacture under the Central Excise Tariff chapter notes because deeming provisions for labelling, relabelling, repacking, or other treatment making goods marketable must be strictly construed. Although the stickers qualified as labels, the goods were already in retail packs, and removal from shippers or larger cartons, together with placement in thermocole boxes for transport, did not amount to repacking from bulk packs to retail packs or any other qualifying treatment. The duty demand and penalties were therefore not sustainable.

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Issues: Whether affixing stickers and carrying out the connected packing activity on imported chocolates and medicaments amounted to manufacture under the relevant chapter notes of the Central Excise Tariff.

Analysis: The chapter notes treated labelling or relabelling of containers intended for consumers, repacking from bulk packs to retail packs, or any other treatment rendering the product marketable to the consumer as manufacture. The Court applied the definition of label in the Packaged Commodities Rules and held that the stickers affixed by the importers were labels. However, the notes were deemed provisions and had to be strictly construed. Labelling or relabelling by itself was not enough unless accompanied by repacking from bulk packs to retail packs or by some other separate treatment contemplated by the notes. On the facts, the goods were already in retail packs, removal from shippers or larger cartons did not amount to repacking from bulk to retail, and the incidental placement in thermocole boxes for transport did not change that position.

Conclusion: The activities did not amount to manufacture, and the duty demand and penalties could not be sustained.

Ratio Decidendi: A deeming provision treating labelling, relabelling, or repacking as manufacture must be strictly construed, and mere affixing of labels on goods already in retail packs does not constitute manufacture unless the statutory conditions of repacking from bulk packs to retail packs or other qualifying treatment are satisfied.

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