Re-packing from 50kg bags to 25kg bag of raw material amounts manufacture or cleared as such transaction?

[Yatin Bhopi]

Dear experts

We are manufacturer (Chapter heading No 39) and our products are only for industrial use (No retail sale). Our products are valued as per section 4 (on transaction value).

We have purchased product X our raw material and which is falling under chapter 29. Now due to cancelation of final product order, we wish to sale this raw material X. Product X was purchased in 50kg bags but the customer is insisting to send the product X in 25kg bag instead of 50kg bag (No any other activity is carrying out) . Please let me know:

Can we sale product X in 25kg after re-packing it from 50kg bag? And are we need to follow rule 3 (5) of CCR 2004 to pay duty? or

Is this activity amounts to manufacture? And duty will be payable on transaction value.

AI Summary

Industrial Repacking: Does Splitting 50kg to 25kg Bags Count as Manufacturing? Examining Rule 3(5) CCR 2004. A manufacturer dealing with industrial products seeks advice on whether repacking raw material from 50kg to 25kg bags constitutes manufacturing or if it should be treated as a simple transaction. They inquire about the applicability of rule 3(5) of the CCR 2004 and the duty implications. One expert suggests that repacking qualifies as a manufacturing operation, thus incurring excise duty based on transaction value. Another expert advises that if it's a one-time occurrence due to a canceled order, the goods can be cleared under rule 3(5) to avoid confusion, but continuous repacking would be considered manufacturing.