2017 (5) TMI 944 - AT - Central Excise

Deemed Manufacture - medicaments - The master box was opened and cartons containing vials/bottles were taken out and sticker bearing the details of import Licence no. price and the marks that the product was meant for Animal treatment only and not for human use was pasted on the vial/bottle - whether the process amounts to manufacture? - Held that - the activity of the respondent is confined to only relabeling of retail pack after taking out from master pack and thereafter sold such labeled boxes which is already in the packed form. This activity does not fall under the term repacking from bulk pack to retail pack for the reason that retail pack was already intact while importing the goods and said retail pack was only labeled therefore activity of repacking from bulk pack to retail pack does not exist - Since activity of repacking from bulk pack to retail pack does not exist the activity carried out does not amount to manufacture - appeal dismissed - decided against Revenue.

Summary

Issues:
1. Whether the activity of relabeling and selling products amounts to manufacture under Chapter 30?
2. Interpretation of Chapter Note 5 of Chapter 30 regarding repacking from bulk pack to retail pack.

Analysis:
1. The case involved the appellant importing Illiren & Receptal, patent and proprietary medicaments in master boxes, with individual cartons containing vials/bottles. The department argued that relabeling the products amounted to manufacture under Chapter 30. In a previous round, the matter was remanded to the adjudicating authority based on the Supreme Court judgment in the case of Commissioner of Central Excise, Mumbai v. Johnson & Johnson Ltd. The Commissioner(Appeals) dropped the demand, stating that the appellant did not engage in activities requiring repacking from bulk to retail packs. The Revenue appealed this decision.

2. The Revenue contended that the appellant's activity of relabeling products amounted to manufacture under Chapter 30, specifically citing Chapter Note 5. This note states that repacking from bulk pack to retail pack constitutes manufacture. However, the Tribunal found that the appellant's activity only involved relabeling retail packs taken from master packs, which did not qualify as repacking from bulk to retail. The Tribunal emphasized the Supreme Court's ruling that conversion from bulk to retail packs is necessary for an activity to be considered manufacture under Chapter Note 5. As the appellant did not engage in repacking from bulk to retail pack, the Tribunal upheld the impugned order, dismissing the Revenue's appeals.

In conclusion, the Tribunal ruled that the appellant's activity of relabeling retail packs did not amount to manufacture under Chapter 30 as it did not involve repacking from bulk to retail packs. The decision was based on the interpretation of Chapter Note 5 and the requirement for conversion from bulk to retail packs as per legal precedent.