TaxTMI 
TaxTMI 
2014 (2) TMI 60
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.... 2007: Whether the Tribunal is right in holding that the labelling and re-labelling activity performed by the respondent is not amounting to "manufacture" as per Note 5 of the Chapter 38 of the Central Excise Tariff Act, 1985? CMA No.1354 of 2008: 1. Whether the Tribunal is right in holding that the labelling and re-labelling activity performed by the respondent is not amounting to "manufacture" as per Note 5 of the Chapter 38 of the Central Excise Tariff Act, 1985? 2. Whether the Tribunal is right in holding that the first respondent had labelled their name, address and brand name on the barrels to meet the requirements of (Packaged Commodities) Rules, 1977 especially when the first respondent is not obliged to follow the provision of Standards of Weights and Measures Act, 1976 and the Rules made there under and had erased the markings on the imported barrels and inscribed the first respondent's name (IAL) and address, taken samples, tested them and enclosed the test report to make the product marketable? 4. The Tribunal while dismissing the appeal filed by the Revenue in the Final Order No.1168 of 2007 dated 14.09.2007 relied upon the final order dated 21.03.2007, ....
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.....03.2007 allowed the appeal filed by the first respondent/assessee vide order dated 14.09.2007 and as against which, the Revenue has preferred CMA No.1354 of 2008. 7. The short question, which falls for our consideration in both these appeals is as to whether the operations carried on by the first respondent/assessee amounted to manufacture in terms of Note 5 to Chapter 38 of the CETA Schedule? 8. For better appreciation, the said provision is quoted herein below: "Chapter 38 - Miscellaneous Chemical Products Note:5. In relation to products of this Chapter [other than products of heading No.38.08] labelling or re-labelling of containers and re-packing from bulk packs to retail packs or the adoption of any other treatment to render the product marketable to the consumer, shall amount to manufacture. " Now we are required to examine the nature of activity done by the first respondent/assessee and whether it would fall within the mischief of "manufacture" as mentioned in Note 5 of Chapter 38 quoted above. 9. The first respondent/assessee imported certain additives in barrels, which contain the name of the foreign supplier and their identity. These were removed by the....
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....mstances, which were prevalent at that relevant point of time. After examining the nature of activity done by the first respondent/assessee, the Tribunal recorded a finding of fact that the first respondent has re-labelled their name address and brand name on the barrels containing goods imported by them and this was to meet the requirements under Rule 33 of the Standards of Weights and Measures [Packaged Commodities] Rules, 1977 framed under the Standards of Weights and Measures Act and not to render the goods marketable so as to attract Note 5 of Chapter 38 of CETA Schedule, which was in pari materia to Note 5 of Chapter 30 of CETA Schedule, 1985. Further, it is to be noted that there is no dispute that the goods imported in barrels were sold as such in India after re-labelling activity done by the first respondent/assessee and such re-labelling activity did not involve any re-packing from bulk to retail pack. 12. Reliance was placed on the decision of the Hon'ble Supreme Court in the case of Commissioner of Central Excise vs. Johnson & Johnson Ltd., reported in 2005 (188) ELT 467 (SC) wherein the Hon'ble Supreme Court held that Note 5 of Chapter 30 was held to be inapplicable....
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....the quality of the product, which has been imported. Since the cap, which was used to seal the barrel had been removed while taking the samples, such barrels have to be re-capped. That apart, the Original Authority noticed that the entire activities done by the first respondent/assessee is with the knowledge of the customers and not at the back of them and the activity was not for the purpose of rendering the product marketable since the product was assured by a buyer and there was no uncertainty about its sale. Therefore, what has been done by the first respondent/assessee was totally unrelated to the sale of the product and such activity would fall outside the scope and purview of Note 5 of Chapter 38 of the CETA Schedule. 18. Then coming to the aspect as to whether the activity done by the first respondent/assessee would amount to adoption of any other terms to render the product marketable, we find from the facts that the activities done by the first respondent/assessee is not in any way transform the imported product into different product, which was distinct in name, character and use and were not incidental or ancillary to the completion of the finished product and thus n....