Filtering and packing; whether manufacture?

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Mayur Mehta (Querist)
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12 December 2012 Dear Sir

I need your expert advice on the issue, whether filtering and packing of edible oil (vegetable / groundnut / cotton seed) in 15 kg tins and 5 kg cans amounts to manufacture under Central Excise Act, 1944 and leviable to excise or not.

Thanks
CA Mayur Mehta

CA CS Amit S. Kedia

CA CS Amit S. Kedia (Expert)
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12 December 2012 Dear Mr. Mayur,

This is not covered under the definition of manufacture.
Filtering and packing in small tins is not manufacture.

Mayur Mehta

Mayur Mehta (Querist)
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13 December 2012 Thanks a lot..

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Mayur Mehta

Mayur Mehta (Querist)
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14 December 2012 Dear Sir

Will the situation be same if the person engaged in filtering and packing also affixes his own brand labels and then sells?

regards

Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
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24 July 2024 Filtering and packing of edible oils, such as vegetable, groundnut, or cottonseed oil, into 15 kg tins or 5 kg cans, and affixing own brand labels, raises questions about whether these activities constitute "manufacture" under the Central Excise Act, 1944. Let's break down the considerations:

### Filtering and Packing

1. **Definition of Manufacture:** According to the Central Excise Act, "manufacture" includes any process:
- Incidental or ancillary to the completion of a manufactured product, and
- Resulting in a distinct commercial product with a different character or use.

2. **Filtering and Packing:**
- **Filtering:** This involves the process of purifying or removing impurities from the edible oil, which enhances its quality but may not fundamentally change its essential character.
- **Packing:** Putting the filtered oil into containers (15 kg tins or 5 kg cans) is primarily for convenience, storage, and retail purposes.

3. **Manufacture Determination:**
- The key question is whether filtering and packing transform the edible oil into a new product with a different character or use.
- Generally, if the nature, essential characteristics, and identity of the oil remain unchanged after filtering and packing, it may not qualify as "manufacture" for excise duty purposes.

### Affixing Own Brand Labels

1. **Impact of Branding:**
- Affixing own brand labels typically involves adding identifiable marks or labels to the containers.
- While branding adds value and distinguishes the product in the market, it may not alter the fundamental nature or characteristics of the product itself.

2. **Excise Duty Implication:**
- If filtering and packing alone do not constitute manufacture, affixing own brand labels typically does not change this classification.
- However, if the labeling process involves substantial changes or additional processing that alters the product's character or use, it could impact the excise duty liability.

### Conclusion

- **Filtering and Packing:** In many cases, filtering and packing of edible oils into different containers may not be considered "manufacture" under Central Excise law if they do not change the essential nature or characteristics of the oil.
- **Labeling:** Affixing own brand labels, while adding commercial value, does not necessarily change the fundamental nature of the product unless it involves significant alterations or processing.

It is advisable to consult with a qualified tax professional or legal expert specializing in excise laws to ensure compliance with specific regulations and interpretations applicable to your circumstances. They can provide tailored advice based on the exact nature of your operations and products.