Two things.  
First, make setVisible the last call AFTER you have built your frame and it's contents...ie
JFrame frame = new JFrame("IMAGE");
frame.setSize(500,500);
frame.setDefaultCloseOperation(JFrame.EXIT_ON_CLOSE);
ImageIcon image = new ImageIcon("image/pic1.jpg");
JLabel label = new JLabel("", image, JLabel.CENTER);
JPanel panel = new JPanel(new BorderLayout());
panel.add( label, BorderLayout.CENTER );
// Make me last
frame.setVisible(true);
Two, make sure that the image/pic1.jpg exists and is the directory image under the current execution context.
If the image is a embedded resource (lives within the Jar or your application), then you need to supply a URL to the image instead of a String as ImageIcon treats String as a file name...
ImageIcon image = new ImageIcon(PICS.class.getResource("image/pic1.jpg"));
For example.
I would encourage you to use JFrame#pack over JFrame#setSize as it will resize the frame to the preferred size of your content...
I would also encourage you to take the time to read through Code Conventions for the Java Programming Language, Initial Threads.
I would also encourage you to use ImageIO over ImageIcon as it will, at least, throw an Exception if something goes wrong
Updated, testing image path
Try adding this to the constructor of your PICS class.  This will, at least, tell you where the image isn't...
try {
    ImageIO.read(PICS.class.getResource("image/pic1.jpg"));
} catch (IOException ex) {
System.out.println("Not in image/pic1.jpg");
}
try {
    ImageIO.read(PICS.class.getResource("/image/pic1.jpg"));
} catch (IOException ex) {
System.out.println("Not in /image/pic1.jpg");
}
try {
    ImageIO.read(PICS.class.getResource("resources/image/pic1.jpg"));
} catch (IOException ex) {
System.out.println("Not in resources/image/pic1.jpg");
}
try {
    ImageIO.read(PICS.class.getResource("/resources/image/pic1.jpg"));
} catch (IOException ex) {
System.out.println("Not in /resources/image/pic1.jpg");
}