Packing retail medicament packs into one carton is not manufacture where no repacking from bulk or relabelling occurs.

Packing duty-paid retail medicament packs into a single carton to meet customer requirements did not amount to manufacture under Chapter Note 5 of Chapter 30. The activity was limited to selecting required quantities from existing retail packs and placing them together, rather than repacking bulk packs into retail packs, relabelling, or any treatment that rendered the goods marketable. As the statutory test of manufacture was not satisfied, no duty liability arose on these facts.

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Issues: Whether packing assorted retail packs of medicaments into a single carton for supply to customers amounted to manufacture under Chapter Note 5 of Chapter 30 of the First Schedule to the Central Excise Tariff Act, 1985, attracting duty under Section 4A of the Central Excise Act.

Analysis: The received goods were already duty-paid retail packs and marketable. The activity undertaken was limited to taking required quantities of different medicaments from different cartons and placing them in one carton according to customer requirements. The Chapter Note applies to conversion of powder into tablets or capsules, labelling or relabelling of containers intended for consumers, and repacking from bulk packs to retail packs, or other treatment to render the product marketable. The Court held that the process in question was not repacking from bulk packs to retail packs, nor relabelling, and therefore did not satisfy the statutory test of manufacture.

Conclusion: The activity did not amount to manufacture, no duty liability arose on these facts, and the departmental appeal failed.

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