Labelling medicaments alone is not manufacture under Chapter 30 unless accompanied by repacking from bulk to retail packs.

Mere labelling or relabelling of medicaments does not by itself amount to manufacture under Note 5 to Chapter 30 of the Central Excise Tariff Act, 1985. The deeming fiction applies only when the prescribed process is satisfied, including repacking from bulk packs to retail packs. On the stated facts, there was no finding that repacking had been undertaken in addition to labelling, and the earlier Apex Court decision governed the issue. The demand and penalty were therefore not sustainable.

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Issues: Whether the activity of merely labelling or relabelling medicaments, without repacking them from bulk packs to retail packs, amounted to manufacture under Note 5 to Chapter 30 of the Schedule to the Central Excise Tariff Act, 1985.

Analysis: Note 5 to Chapter 30 creates a deeming fiction of manufacture only when the prescribed processes are satisfied. The governing principle applied was that labelling or relabelling by itself is insufficient to attract the deeming provision; repacking from bulk pack to retail pack is also required. On the facts, there was no finding that the appellants had undertaken repacking in addition to labelling. The earlier decision affirmed by the Apex Court governed the controversy and squarely applied to the present facts.

Conclusion: The activity did not amount to manufacture under Note 5 to Chapter 30, and the demand and penalty could not be sustained.

Ratio Decidendi: Mere labelling or relabelling of medicaments does not constitute manufacture under Note 5 to Chapter 30 of the Central Excise Tariff Act, 1985 unless it is accompanied by repacking from bulk packs to retail packs.

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