2002 (4) TMI 152 - AT - Central Excise

Statutory sticker pasted on already-labelled imported goods: does Note 6 Ch. 34 treat it as manufacture? Appeal dismissed

The dominant issue was whether affixing a statutory sticker showing importer particulars and MRP on already-labelled imported goods constituted ... Manufacture - Whether affixing of sticker on a label will amount to manufacture in terms of Note 6 to Chapter 34 of the Schedule to the Central Excise Tariff Act. - Imposing the penalty holding that the sticker indicating the name of the importer and the MRP was required to be put as the same was mandatory under Section 33 of Standards of Weights and Measures (Packed Commodity) Act, 1977 and that labelling the products amounts to manufacture in terms of Note 6 to Chapter 34. HELD THAT:-It is not the case of the Revenue that the label has been replaced by a new label or any label has been pasted over the existing label. Accordingly, it cannot be claimed that the process undertaken by the appellants amounts either to labelling or re-labelling. The Central Board of Excise & Customs has taken the same view in respect of imported finished medicines which were sold after pasting sticker on the cartons of the imported item in view of the requirement of the Drugs and Cosmetics Act without altering any information originally contained in the packet. The Board clarified that Note 5 to Chapter 30 may not be attracted in such a situation. Note 5 to Chapter 30 is para meteria to Note 6 to Chapter 34. Accordingly, we do not find any infirmity in the impugned Order and therefore reject the appeal filed by the Revenue. 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.