RG 1 stage fixed at the cutting stage where fibre fragments became the relevant product, not after later processing or storage.

The RG 1 stage for flocks arose when nylon and viscose fibres were cut into microsize fragments not exceeding 5 mm., because that point marked emergence of the relevant product. The subsequent washing, drying, dyeing, sizing, sorting, moisturisation and air-conditioned storage did not amount to manufacture, as they did not bring into existence a new and distinct product. Accordingly, completion of manufacture was fixed at the cutting stage, and the later processing stages did not defer the RG 1 stage.

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Issues: Whether the RG 1 stage of flocks was reached at the point when nylon and viscose fibres were cut into microsize fragments not exceeding 5 mm. in length, or only after the subsequent processes of washing, drying, dyeing, sizing, sorting, moisturisation and storage in the air-conditioned room.

Analysis: The cutting of nylon and viscose fibres into lengths not exceeding 5 mm. was treated as the point at which flocks emerged as the relevant product. The later processes of washing, drying, dyeing, sizing, sorting and moisturisation were found not to amount to manufacture, as no new and different product came into existence. Since the subsequent processes did not affect the completion of manufacture, the view that the goods became complete only after storage in the air-conditioned room was inconsistent with that legal position.

Conclusion: The RG 1 stage was held to arise when the fibres were cut into lengths not exceeding 5 mm., and not after the later processing or storage stages.

Ratio Decidendi: Where post-cutting treatment does not bring into existence a new and distinct product, the goods are regarded as manufactured at the cut stage and the RG 1 stage is fixed accordingly.

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