2002 (4) TMI 152 - AT - Central Excise

Summary

Issues involved: The issue involved in this appeal is whether affixing a sticker on a label amounts to manufacture in terms of Note 6 to Chapter 34 of the Schedule to the Central Excise Tariff Act.

Comprehensive Details:

1. Issue of Affixing Sticker on Label:
The Departmental Representative argued that affixing a label with importer's name and MRP on imported toilet soaps constitutes manufacture as per Note 6 to Chapter 34. The Additional Commissioner confirmed duty demand and penalty based on this, citing the requirement under the Standards of Weights and Measures Act. However, the Commissioner (Appeals) overturned this decision, stating that affixing the label did not amount to manufacture under Note 6.

2. Definition of Label and Relabelling:
The Departmental Representative highlighted that as per the Standards of Weights and Measures Act, a label includes any written or graphic matter affixed to a commodity. Relabelling, as per the Act, involves replacing the original label with a new one. Thus, pasting additional information on a package constitutes labelling and falls under Note 6 to Chapter 34.

3. Argument Against Labeling as Manufacture:
The Advocate for the respondents argued that a mere sticker with importer's name and MRP does not qualify as a label, which traditionally includes detailed information about the product. Referring to a Trade Notice and a Board's Circular, it was contended that pasting stickers on imported goods may not be covered by Note 5 to Chapter 30. Citing a previous case, it was emphasized that enhancing marketability does not always amount to manufacture.

4. Judgment and Interpretation of Note 6:
The Tribunal analyzed Note 6 to Chapter 34, which deems labelling or re-labelling as manufacturing processes. In the present case, the respondents only affixed stickers to indicate importer's name and MRP, as required by the Weights and Measures Act. The Tribunal concluded that this activity did not amount to labelling or re-labelling as defined under Note 6. Referring to a similar case involving imported medicines, it was noted that affixing stickers without altering original information did not attract Note 5 to Chapter 30. Therefore, the Tribunal rejected the Revenue's appeal, finding no fault in the lower order.