LINCOLN PARENTARALS LTD. Vs. COMMR. OF C. EX.

JUDGEMENT

(1.) The issue involved in this appeal, filed by M/s. Lincoln Parentarals Limited, is whether Note 5 to Chapter 30 of the Schedule to the Central Excise Tariff Act is attracted in the facts and circumstances of the matter.

(2.) Shri Jitendra Singh, learned Advocate, submitted that the Appellants manufacture medicaments falling under Chapter 30 of the Central Excise Tariff; M/s. Bombay Tablets Manufacturing Company has also been manufacturing medicaments as a loan licensee in the factory of the Appellants; that certain medicines were cleared to M/s. Bombay Tablets Manufacturing Company on payment of duty under invoice; that the ingredients mentioned on the label were Ampicillien Sodium IP 250 mg and Cloxacillin 250 mg; that, however, by mistake of the printer who had printed the labels, the ingredients were printed as Ampicillien Sodium IP 500 mg and Cloxacillin 500 mg; that subsequently, when the mistake was discovered the goods were brought back to the appellants factory for correcting mistake by changing the labels under the provisions of Rule 173H of Central Excise Rules, 1944 and after changing the labels the goods were removed without payment of duty as permitted under Rule 173H; that the Additional Commissioner, under the Adjudication Order No. 252/99, dated 7 -10 -99 has confirmed the demand of duty and imposed a penalty, holding that the process of re -labelling undertaken by the assessee amounts to manufacture in terms of Note 5 to Chapter 30; that the Commissioner (Appeals) also under the impugned Order has rejected their appeal holding that the goods were re -labelled which amount to manufacture; that the reasons for re -labelling is immaterial. The learned Advocate, further, submitted that the activities like re -labelling and re -packing which ordinarily do not constitute manufacture are deemed to be manufacture under Note 5 only for recovering duty on value addition resulting from re -labelling and repacking and not otherwise; that in a simple case like the present one where labels were changed only on account of printing mistake regarding ingredients of the medicaments, Note 5 is not attracted; that this kind of change of labels for the purpose of rectifying a mistake as is done in the present matter, cannot be termed as re -labelling; that the case of the Appellants is squarely covered under Rule 173H and not under Rule 173L by virtue of Note 5 to Chapter 30. The learned Advocate also relied upon the decision of the Tribunal in the case of ADI Enterprises v. CCE, Mumbai, 2002 (144) E.L.T. 379 (T) wherein it has been held that "Act of putting various items as soap, shampoo, hair oil and cream in one package does not result in emergence of a new article distinct as by the act of combining these items in one pack, all that has happened is that they have been packed for sale as a set"; that the Tribunal also held that Note 4 to Chapter 33 or Note 6 to Chapter 34 would apply only when the product is subjected to one of the processes specified in the Notes and that process must render it marketable to the consumer; that by being put in a pack, it cannot be said that they acquired the attribute of being marketable which it did not earlier possess. Reliance has also been placed on the decision in the case of Amonia Supply Company v. CCE, 2001 (131) E.L.T. 626 (T) wherein it has been held that "filling the liquid Amonia gas from tanker into smaller cylinders does not amount to "Manufacture" within Note 10 to Chapter 28 of the Central Excise Tariff." Finally the learned Advocate contended that Note 5 would apply only when the process of re -labelling along with repacking from bulk pack to retail is undertaken "and" has been used in the Chapter Note.

(3.) Shri V. Valte, learned SDR reiterated the findings as contained in the impugned order.