Government of India
Ministry of Finance
Department of Revenue
Tax Research Unit, New Delhi
Subject: Clarification regarding labelling and repacking etc. amounting to manufacture.
I am directed to refer to the Chapter notes introduced in this year”s budget enlarging the scope of the term “manufacture” in respect of products falling under chapters 28, 29, 34, 35, or 38 of the central excise tariff.
1. In this context, clarification have been sought regarding the scope of the expression “relabelling of containers and repacking from bulk packs”. Doubts have been raised as to whether receiving of liquid chemicals in bulk in containers and off loading the same. at the dealers premises or godown into available empty vessel and consequent delivery of these material in the very same condition to customers against orders can be held to be an act of repacking operations as envisaged in the said chapter note or not.
2. Whether an operation amounts to repacking or not, is a question to be decided on facts. However, activity such as simply transferring the material from one container to another container may not be categorised under the scope of this description. The goods are packed either for wholesale or for retail sale. Generally the expression “Packing” is considered as package containing a prepacked commodity and the quantity of product contained therein is also pre-determined. The packaging is also generally done without the purchaser being present. The packages also contain information such as name of the manufacturer, quantity, value and other details of the product.
3. In view of the above, the question whether or not duty is liable to be paid depends upon the facts of individual case and the decision has to be taken taking into account all relevant facts. The chapter notes inserted are on the lines of similar chapter notes used earlier in other and they have to be interpreted as usual.