Testing, inspection and packing alone do not amount to manufacture when actual production is done by job workers.

Testing, inspection and packing of finished goods did not amount to manufacture where the actual job-work manufacturing was carried out by independent job workers. The Tribunal applied its earlier view that such post-manufacture activities, by themselves, do not make the appellants the manufacturers in law. As no manufacturing activity was undertaken by the appellants, the duty demand and penalties were held unsustainable and were set aside.

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Issues: Whether the activities of testing, inspection and packing carried out by the appellants amounted to manufacture, and whether the duty demand raised on them was sustainable.

Analysis: The admitted position was that the actual job-work manufacturing the goods was done by the job workers, while the appellants only tested, inspected and packed the finished items. The Tribunal followed its earlier view that such activities do not amount to manufacture, and treated the actual manufacturers as the persons who carried out the manufacturing process in law.

Conclusion: The appellants did not undertake any manufacturing activity. The duty demand and penalties were unsustainable and were set aside.

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