Mercury repacking not manufacturing under Chapter 28; duty and penalty appeal allowed.

The tribunal held that repacking of mercury without labeling or relabeling does not amount to manufacture under note 10 of Chapter 28. Citing a Supreme Court decision, the tribunal found that repacking from bulk to smaller containers alone is insufficient to render the product marketable. As a result, the demand for duty and penalty imposed on the appellant was deemed invalid, and the appeals were allowed.

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Issues:
1. Whether repacking of mercury amounts to manufacture under note 10 of Chapter 28 of the Central Excise Tariff Act.
2. Whether the demand of duty and penalty imposed on the appellant is valid.
3. Whether the earlier order in seizure-cum-demand proceedings affects the decision in the current proceedings.

Analysis:
1. The appellant argued that the Show Cause Notice alleged repacking of mercury, which they contended does not amount to manufacture under note 10 of Chapter 28. They emphasized that no labeling or relabeling was involved, citing a Supreme Court decision in the case of Vadilal Gases to support their stance that simple purification does not constitute manufacture. The appellant also highlighted that a similar proceeding where the demand was dropped should influence the decision in the current case.

2. The respondent, on the other hand, relied on the impugned order and argued that the Commissioner's decision in the earlier seizure-cum-demand proceedings was based on incorrect facts. They pointed out a report indicating repacking from bulk to smaller containers, which they claimed rendered the product marketable to consumers. However, the appellant countered this argument by stressing the absence of labeling or relabeling, which is crucial for the activity to amount to manufacture under note 10 of Chapter 28.

3. The tribunal referred to the Supreme Court's interpretation of a similar provision in Chapter 30 in the case of Johnson & Johnson Ltd. The court emphasized that repacking from bulk packs to retail packs is essential to constitute manufacture. Applying this interpretation to the current case, the tribunal concluded that merely repacking from bulk to smaller containers without any labeling or relabeling does not amount to manufacture. Therefore, the demand for duty and penalty was deemed invalid, and the appeals were allowed.

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