2008 (4) TMI 46 - SC - Central Excise

Helium is procured by assessee from other manufacturers & sold affixing label of their own brand name held that mere packing for marketing would not amount to manufacture that mere labeling or relabeling in the absence of any activity of repacking from bulk packs to retail packs would not render the product marketable directly to the consumer no manufacturing revenue s appeal dismissed

Summary

Issues:
1. Interpretation of Chapter 28 of the Central Excise Tariff regarding labeling/relabeling and repacking activities.
2. Determination of whether affixing labels amounts to manufacturing under Note 10 of Chapter 28.
3. Application of legal principles from previous judgments in similar cases.

Analysis:
1. The case involved a dispute regarding the interpretation of Chapter 28 of the Central Excise Tariff, specifically Note 10, which states that labeling or relabeling of containers and repacking from bulk packs to retail packs amount to manufacture. The Tribunal allowed the assessee's appeals based on a previous judgment in the case of M/s. Ammonia Supply Co. v. CCE, New Delhi, where it was held that certain activities did not make the product marketable.

2. The revenue issued a show cause notice alleging that affixing labels by the respondent created a legal fiction of manufacture under Note 10 of Chapter 28. The Joint Commissioner confirmed the demand and imposed penalties, which were upheld by the Commissioner (Appeals). However, the Tribunal accepted the respondent's appeal, ruling that the respondent was not involved in manufacturing as they only labeled or relabeled the product, without repacking from bulk packs to retail packs.

3. In a similar case, Commissioner of Central Excise, Mumbai v. Johnson & Johnson Ltd., the Supreme Court held that mere packing for marketing would not amount to manufacture. The Court emphasized that repacking from bulk packs to retail packs is necessary to render the product marketable directly to the consumer. In line with this precedent, the Supreme Court dismissed the revenue's appeals, agreeing with the interpretation of Note 10 of Chapter 28 and leaving the parties to bear their own costs.