Government of India
Ministry of Finance
Department of Revenue
Central Board of Central Excise &Customs
Circular No. 910/30/2009 - CX
New Delhi, the 16 December 2009
To
All the Chief Commissioners of Custom and Central Excise
Director General (CEI), Director General (Audit), Director General (Inspection)
Sir
Subject : Clarification regarding labelling and
repacking etc. amounting to manufacture.
It has been brought to the notice of Board that certain dealers are receiving
liquid chemicals in bulk in containers and offloading the same at the dealers’
premises or godown into drums of 200ltrs for subsequent marketing of these
materials to customers. Doubts have been raised as to whether such activity
would amount to manufacture in terms of Chapter Note 10 to Chapter 29. As the
said Chapter Note has been amended in 2008 budget, it has been contested that
the said activity is covered by the present wordings of the Chapter note. The
relevant portions of the chapter note reads as under:
Before Amendment (1.03.2008)
10. In relation to products of this Chapter, labelling or relabelling of
containers and repacking from bulk packs to retail packs or the adoption of any
other treatment to render the product marketable to the consumer, shall amount
to ‘manufacture’.
After amendment (1.03.2008)
10. In relation to products of this Chapter, labelling or relabelling of
containers or repacking from bulk packs to retail packs or the adoption of any
other treatment to render the product marketable to the consumer, shall amount
to ‘manufacture’.
- Whether an operation amounts to repacking from bulk packs to retail packs or
not, is a question to be decided on facts. However before examining the
implication of the substitution of word ‘and’ by ‘or’, it is necessary to
examine whether the activity itself is covered by term repacking from bulk packs
to retail packs. Hence the first issue which needs to be decided is whether the
“container/ lorry tanker” can be considered as bulk pack.
- Tribunal has in the case of Ammonia Supply Co. [2001 (131) ELT 626 (T)], held
that “As per Note quoted above, labelling or re-labelling of the container
should take place at a time when the goods are packed from bulk packs to retail
packs. The assessee was not getting Ammonia in bulk packs. They were getting it
in tankers. Ammonia gas brought in tankers can never be termed as brought in
bulk packs. So the assessee was not repacking the goods from bulk packs to
retail packs. Accordingly the activity undertaken by the assessee in filling the
smaller container from bulk container namely tankers can never fall within the
fiction of manufacture as envisaged by Note 10 quoted above.”
- Therefore the tankers cannot be termed as bulk packs and therefore the
activity of transferring the goods from tankers into smaller drums cannot be
said to be covered by the said chapter note 10.
- Pending cases may be disposed of accordingly.
- Hindi version will follow.
Yours faithfully
Madan Mohan
Under Secretary (CX 1)
F No 6/3/2009-DS (CX 1 & 4)