Repacking and relabelling of duty-paid goods is not manufacture where no distinct marketable product emerges under Central Excise law.

Repacking duty-paid goods from bulk packs into smaller packs, with relabelling, did not by itself amount to manufacture under Central Excise law because mere repacking of marketable goods does not create a distinct marketable product within the statutory definition. The tariff notes and prior tribunal view supported the principle that conversion from bulk to retail packs is not automatically manufacture. On the facts, the process was not manufacture, so the duty demand, penalty and interest could not survive.

---

---

Issues: Whether repacking, relabelling and re-labelling of duty-paid goods from bulk packs into smaller packs amounted to manufacture under the Central Excise law, attracting duty, penalty and interest.

Analysis: The activity involved taking goods received in bulk or wholesale packs and placing them into smaller packs or containers with trade mark labelling. The governing tariff notes and the settled view on manufacture show that mere repacking or relabelling of marketable goods does not, by itself, amount to manufacture unless the process results in a distinct marketable product within the statutory definition. The cited trade notice and prior tribunal decisions supported the view that conversion from bulk pack to retail pack is not, in every case, manufacture, and that the department's reliance on a broader reading of the tariff notes did not displace that principle on the facts presented.

Conclusion: The process undertaken by the appellant did not amount to manufacture, so the demand of duty, penalty and interest could not survive.

---