Pesticide formulation and manufacture: dilution with additives was treated as prima facie not creating a new product.

Mixing pesticides with inert material and surface active dispersing and stabilising agents was examined as a manufacture issue rather than a classification dispute. The Tribunal noted that the Revenue had not identified any Chapter note or Section note in the new tariff deeming the activity to be manufacture, and treated an earlier decision on similar pesticide processing as prima facie relevant because dilution and formulation did not create a new product with a distinct name, character and use. The applicants therefore established a prima facie case against treatment of the process as manufacture and obtained waiver of the pre-deposit of duty and penalty.

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Issues: Whether the formulation of pesticides by mixing them with inert material and surface active dispersing and stabilising agents amounts to manufacture, and whether the applicants had made out a prima facie case for waiver of pre-deposit of duty and penalty.

Analysis: The dispute related to manufacture, not classification. The Tribunal noted that the Revenue had not shown any Chapter note or Section note in the new tariff treating the activity as manufacture. It also treated the earlier Tribunal decision on similar pesticide processing as prima facie relevant, where dilution and formulation of the basic product did not result in a new product with a distinct name, character and use.

Conclusion: The process was held to have a prima facie case against treatment as manufacture, and the applicants were held entitled to waiver of the entire pre-deposit of duty and penalty.

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