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77. While considering the Chapter Note No. 6 of Chapter 34 which provided that  in relation to the product sub-heading number 3402 90, packing or repacking into smaller pack including packing or repacking of bulk pack to the retail packs or adoption of any other treatment to render the product marketable to the consumer shall amount to manufacture, the Apex Court in Mercantile Company vs. C.C.E., Calcutta reported in 2007 (217) ELT 330 (SC) held that the term manufacture with reference to repacking from bulk packing to retail packs introduced by the Finance Act, 1994 clearly points to the fact that even if the bulk material is identifiable as excisable goods, the fact of repacking from bulk to retail pack would render the product separately classifiable, while rejecting the plea that the marketing of the product in smaller containers under different name shall also not amount to manufacture unless the nature and identity of the product is changed and in the case before the Supreme Court there was no such change in the product. It was specifically held that the same was of no consequence in view of the said Note.

81. In Lupin Laboratories case, the subject matter for consideration was Note No.5 of Chapter 30. The said Note provided that in relation to the drugs under Heading 30.03 conversion of powder into tablets or capsules, labeling or relabeling of containers intended for consumer and repacking from bulk pack to retail packs or adoption of any other treatment to render the product marketable to the consumer, shall amount to manufacture. It was sought to be contended that as a result of packing of two or three separate medicaments together a new product emerges and therefore, though it may be covered by the said Note but would be entitled for the exemption benefit under the Notifications namely, Notification No.75/94 and No.30/88 and therefore, the product was not liable to duty. The Tribunal after taking note of the decision in Lakme Lever Ltd. case observed that it was relevant to note that four or three tablets were initially packed after their manufacture into the said combination of packing and it was not as if they were first packed into separate packing and thereafter, drawn from such packing and put into subsequent packing which was under consideration. Having so observed, it was held that the intention of the law maker was to ensure that the value addition which is sometimes substantiated which results as a consequence of packing the product into retail pack should be subject to duty. Each of the processes referred to in the Note, conversion of powder into tablets labeling or relabeling of container intended for consumer, repacking from bulk pack to retail packs obviously results in or facilitates sale of the product to the retail consumer. The adoption of any other treatment refers to in each of these processes referred in the Note would be such treatment that would render the product marketable to a consumer. The decision was not on the point as to whether the marketability aspect was necessarily related to retail consumer or not. The observation that the repacking from bulk pack to retail packs facilities sale of a product to retail consumer cannot be understood to mean that the term consumer in the Note necessarily refers to a retail consumer or that the Tribunal has held so. One cannot understand the ratio of an order ignoring the facts of the case and the points which were considered in the matter while deciding the same.

83. In Conybio Healthcare (India) Pvt. Ltd. the Tribunal was considering Chapter Note 4 of Chapters 61 and 62. The Note provided that  in relation to a product of this chapter, affixing brand name on the product labeling or relabeling of its containers and repacking 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. It was held that the language used in the chapter note clearly indicates repacking from bulk pack to retail packs would not by itself amount to manufacture. Besides, there must be labeling or relabeling or affixing of brand name also. Applying the ruling in the matter of C.C.E., Mumbai vs. Johnson & Johnson Ltd. reported in 2005 (188) ELT 467, it was held that Chapter Note 5 of Chapter 30 which was the subject matter of Johson & Johnsons case was in pari materia to the said Note 4 and therefore applying the ruling of the Supreme Court there could be no denial of the fact that the firms to which the garment was sold by the assessee in the said case were their distributors and their product was not directly marketed to the consumer. The distributors had to pack the garments in respective printed cartons before retail sale to the consumers. In other words, it was the activity of the distributors which rendered the product marketable directly to the consumers so as to attract Chapter 4 and therefore, there was no repacking from bulk pack to the retail pack rendering the product marketable directly to the consumer by the assessee and therefore, the applicability of Chapter Note 4 was ruled out. Apparently, the decision was given in the peculiar facts of the case established before the Tribunal. That is not the case in the matter in hand.

85. The decision in Johnson & Johnsons was followed by the Supreme Court in Commissioner of Central Excise, Mumbai vs. BOC (I) Ltd. reported in 2008 (226) ELT 323 (SC) while considering the applicability of Chapter Note 10 of Chapter 28 which provided that  in relation to products of this Chapter, labeling or relabeling of containers and repacking from bulk packs to retail packs, or adoption of any other treatment to render the product marketable to the consumer shall amount to manufacture, it was held that not only labeling or relabeling that is necessary but it should be repacking from bulk packs to retail packs. It was essentially because of the word and in between the words containers and repacking in the Note. That does not mean that retail packs are necessarily meant only for the retail consumers. They can be also for consumers like hotel industries, companies engaged in rendering catering services, airlines etc. who may purchase the product packed in retail packs, but in bulk.