Manufacture by repacking and branding: retail packing of flavoured Complan was held incidental to completion of manufacture.

Branding and packing of chocolate flavoured Complan in glass jars was treated as manufacture because Note 7 to Chapter 21 deems labelling, relabelling, repacking from bulk to retail packs, and similar treatment that makes goods marketable to the consumer to be manufacture. The Tribunal also applied the principle that packing in suitable marketable packs is incidental or ancillary to completion of manufacture. As the goods became dutiable only in retail packed form under the relevant tariff sub-heading, Rule 56B of the Central Excise Rules, 1944 applied and the movement of goods for branding and packing was permitted.

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Issues: Whether branding and packing of chocolate flavoured Complan in glass jars amounted to manufacture so as to attract Rule 56B of the Central Excise Rules, 1944.

Analysis: Note 7 to Chapter 21 of the Central Excise Tariff Act, 1985 treats labelling or relabelling, repacking from bulk to retail pack, and other treatment making the product marketable to the consumer as manufacture. The Tribunal also relied on the principle that packing in suitable packs for marketing is part of the manufacturing process. Since the goods became dutiable in retail packed form under the relevant tariff sub-heading, the branding and packing activity was treated as incidental or ancillary to completion of manufacture.

Conclusion: Rule 56B was applicable and the order allowing the movement of goods for branding and packing was upheld, in favour of the assessee.

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