Imported medicines: compliance stickers and unproved repacking did not amount to manufacture under the tariff note.

Imported medicines were held not to be repacked from bulk into retail packs where the Revenue produced no evidence beyond bill of entry descriptions, and the assessee's version that the goods were imported in ampoules within trays and cartons remained unshaken. The Chapter 30 deeming provision was therefore not triggered on repacking. Affixing stickers showing the importer's name and MRP for statutory compliance was also held not to amount to labelling, relabelling or reprocessing when the original package was otherwise unchanged. On that basis, the post-import activity did not constitute manufacture under the tariff note and the demand could not be sustained.

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Issues: (i) Whether the imported medicines were repacked from bulk packs into retail packs so as to attract Note 5 to Chapter 30 of the Central Excise Tariff Act, 1985; (ii) Whether affixing stickers to indicate the importer's name and MRP amounted to labelling or relabelling amounting to manufacture.

Issue (i): Whether the imported medicines were repacked from bulk packs into retail packs so as to attract Note 5 to Chapter 30 of the Central Excise Tariff Act, 1985.

Analysis: The Revenue was required to establish that the goods were imported only in bulk packs and that the assessee converted them into small retail packs. The record showed the assessee's consistent case that the injections were imported in ampoules placed in plastic trays and packed in small cartons, with larger cartons used only for transportation. Mere reference in the Bill of Entry and invoice to the product description was insufficient to displace that explanation. No contrary material was produced to prove actual repacking from bulk to retail packs.

Conclusion: The allegation of repacking was not proved and Note 5 to Chapter 30 was not attracted on that basis.

Issue (ii): Whether affixing stickers to indicate the importer's name and MRP amounted to labelling or relabelling amounting to manufacture.

Analysis: It was held that pasting a sticker on imported medicines to comply with legal requirements as to the importer's name and MRP, without altering the information originally contained on the package, does not amount to labelling, relabelling or reprocessing. The cited circular also clarified that such sticker affixation on imported finished medicines would not attract the Chapter Note where the original package remained unchanged in substance.

Conclusion: Mere sticker affixation for statutory compliance did not constitute manufacture under the Chapter Note.

Final Conclusion: The demand could not survive, as neither repacking from bulk to retail packs nor mere affixation of MRP stickers established manufacture under the tariff note.

Ratio Decidendi: To invoke a chapter note deeming certain post-import activities as manufacture, the Revenue must prove the factual process relied upon, and mere affixation of compliance stickers on imported finished goods does not by itself amount to labelling, relabelling, or manufacture.

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