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Issues: Whether de-foiling and re-foiling of medicaments with revised MRP amounted to manufacture under Chapter 30, and whether the demand for denial of Modvat credit was barred by limitation, including the extended period.
Analysis: The process undertaken involved bringing back duty-paid medicaments, de-foiling and re-foiling them, and clearing them after printing the revised MRP. Under Note 5 to Chapter 30 of the Central Excise Tariff Act, 1985, packing, repacking and relabelling of medicaments is treated as manufacture. The activity was found to be of the same nature as the process on which duty had originally been discharged, and the Tribunal followed the view that such re-packing activity amounted to manufacture. On limitation, the declarations filed showed the inputs and final products, and the invoices also reflected the bulk tablets and re-packed goods. In those circumstances, there was no suppression of facts and the extended period could not be invoked under Rule 57I or Section 11A of the Central Excise Act.
Conclusion: The process amounted to manufacture, and the demand was time-barred; the denial of credit and penalty was unsustainable.
Ratio Decidendi: Repacking and relabelling of medicaments to reflect revised MRP constitutes manufacture under Chapter 30, and where the relevant facts are disclosed through declarations and invoices, the extended limitation period cannot be invoked in the absence of suppression.
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