2002 (4) TMI 342 - AT - Central Excise

Summary

Issues involved:
Whether placing different medicaments in a container amounts to manufacture in terms of Note 5 to Chapter 30 of the Schedule to the Central Excise Tariff Act.

Comprehensive Analysis:

Issue 1: Interpretation of Note 5 to Chapter 30
The dispute in this case revolves around whether the process of placing different medicaments in a container constitutes "manufacture" under Note 5 to Chapter 30 of the Central Excise Tariff Act. The Revenue argued that the process of packing medicines in printed corrugated boxes for distribution as medicine kits amounts to manufacture as per the provisions of Note 5. They contended that this treatment of packing falls within the purview of "adoption of any other treatment" mentioned in the Note. The Revenue relied on specific markings like "Not for sale" to support their claim. They also distinguished a previous case, emphasizing the unique facts of the present matter.

Issue 2: Applicability of Note 5 and Relevant Case Laws
The Respondent, on the other hand, argued that Note 5 to Chapter 30 does not apply since the medicine kits are not sold to consumers, a prerequisite for the Note's application. They relied on the Adjudication Order of the Assistant Commissioner and a Board's Circular to support their stance. Additionally, they cited a previous case where combining marketable products did not confer new marketability attributes. The Respondent emphasized that the product was solely distributed to a specific entity and not for general sale.

Judgment and Analysis of the Tribunal
The Tribunal carefully considered the arguments presented by both parties. It noted that the medicine kit contained both manufactured and boughtout medicines, intended specifically for the M.P. Government and not for general sale. The Adjudicating Authority's finding that neither the medicine kit nor the contained medicines were further sold in the market remained uncontested by the Revenue. The Tribunal interpreted Note 5 to Chapter 30, highlighting that the processes mentioned therein, such as conversion of powder into tablets or capsules, labeling, or repacking, were not conducted by the manufacturer in this case. The Tribunal concurred with the Adjudicating Authority that the only aspect of Note 5 potentially applicable was the "adoption of any other treatment to render the product marketable to the consumer." However, since the product was not intended for general consumer marketability and was supplied to a specific entity, the Tribunal concluded that the process undertaken did not amount to manufacture under Note 5. Consequently, the Tribunal rejected the Revenue's appeal.

In conclusion, the Tribunal's judgment clarified the interpretation of Note 5 to Chapter 30 in the context of placing medicaments in a container and emphasized the importance of the intended marketability of the product in determining whether a process amounts to manufacture for the purposes of Central Excise duty.