COMMISSIONER OF CENTRAL EXCISE BELAPURversusJINDAL DRUGS LTD.

                  [2024] 5 S.C.R. 271 : 2024 INSC 354

             Commissioner of Central Excise Belapur
                              v.
                      Jindal Drugs Ltd.
                       (Civil Appeal No. 1121 of 2016)
                                  30 April 2024
                [Abhay S. Oka and Ujjal Bhuyan,* JJ.]

                            Issue for Consideration
       The issue for consideration is whether an activity of re-labelling of
       goods i.e. cocoa butter and cocoa powder, by affixing additional
       labels on both the sides of the packs containing goods, amounts
       to “manufacture” in terms of Note 3 to Chapter 18 of the Central
       Excise Tariff Act, 1985, for availing the CENVAT Credit and rebate
       on the duty paid while exporting the said goods.

                                   Headnotes
       Central Excise Tariff Act, 1985 – Note 3 to Chapter 18 – Cocoa
       and Cocoa preparations – Whether re-labelling amounts to
       ‘manufacture’ as per Section 2(f) of the Act – Explained:
       Held: Note 3 to Chapter 18 of the Central Excise Tariff Act, 1985
       (post amendment), which deals with Cocoa and Cocoa Preparations
       contemplates that if any of the three processes are satisfied, then
       the activity shall amount to ‘manufacture’, viz., (i) labelling or re-
       labelling of containers; or (ii) repacking from bulk packs to retail
       packs; or (iii) the adoption of any other treatment to render the
       product marketable to the consumer – In the present case, while
       upholding the decision of the Customs, Excise and Service Tax
       Appellate Tribunal, it was held that the activity carried out by the
       Respondent of relabelling on both sides of the packs containing
       the goods and thereafter, introducing in the market or sending it
       for export, amounts to ‘manufacture’ in terms of Note 3 to Chapter
       18 of the Central Excise Tariff Act, 1985. [Para 13.3, 15]
       Central Excise Tariff Act, 1985 – Amendment to Note 3 to
       Chapter 18 of the Central Excise Tariff Act, 1985 – Replacing
       the words ‘or’ by ‘and’ – Interpretation of:
       Held: By way of the amendment in 2008, the word ‘and’ was replaced
       by the word ‘or’ between the expressions ‘labelling or re-labelling of
       containers’ and ‘repacking from bulk packs to retail packs’ – Prior to
       01.03.2008, the legislative intent was quite clear – The process to
* Author
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       constitute manufacture should either be labelling or re-labelling of
       containers and repacking from bulk packs to retail packs – This process
       was construed to be one whole – In other words, the activity should
       not only include labelling or re-labelling of containers but the same
       should relate to repacking from bulk packs to retail packs – This was
       one activity – However, after the amendment i.e. post 01.03.2008,
       Note 3 has undergone a change – Now because of substitution of
       the word ‘or’ in place of the word ‘and’ between the two expressions
       ‘labelling or re-labelling of containers’ and ‘repacking from bulk packs
       to retail packs’, the earlier composite process of labelling or re-labelling
       of containers and repacking from bulk packs to retail packs has been
       split up into two independent processes – Labelling or re-labelling
       of containers is one process and repacking from bulk packs to retail
       packs has now become another process – Therefore, instead of two
       activities, Note 3 now contemplates three activities – The composite
       activity of labelling or re-labelling of containers and repacking from
       bulk packs to retail packs has been split up into two activities i.e.
       labelling or re-labelling of containers is one and the other is repacking
       from bulk packs to retail packs. [Paras 13.2, 13.3]

                                     List of Acts
       Central Excise Tariff Act, 1985.

                                  List of Keywords
       Manufacturing Activity; Re-labelling, CENVAT Credit, Rebate,
       Indirect Tax.

                                 Case Arising From
       CIVIL APPELLATE JURISDICTION: Civil Appeal No.1121 of 2016
       From the Judgment and Order dated 16.04.2015 of the Customs,
       Excise and Service Tax Appellate Tribunal, West Zonal Bench at
       Mumbai in Appeal No. E/86389/13-MUM
       With
       Civil Appeal Nos. 788-790 of 2022
                             Appearances for Parties
       Rupesh Kumar, Sr. Adv., Mukesh Kumar Maroria, Keval Babubhai
       Rathod, Shamik Sanjanwala, Shyam Gopal, Sughosh Subramanyam,
       Rohit Verma, B. Krishna Prasad, Advs. for the Appellant.
[2024] 5 S.C.R.                                                          273

     Commissioner of Central Excise Belapur v. Jindal Drugs Ltd.


     V. Sridharan, Sr. Adv., Prakash Shah, Jas Sanghavi, Jasdeep Singh
     Dhillon, Prabhat Kumar Chaurasia, Yuganthar Singh Chauhan, Rahul
     Gupta, Prabhat Chaurasia, Yugantar Singh Chauhan, Anirudh Jamwal,
     Advs. for the Respondent.
                Judgment / Order of the Supreme Court
                                  Judgement
     Ujjal Bhuyan, J.
     Heard learned counsel for the parties.
2.   Issue raised in the present batch of appeals is identical. Therefore,
     the civil appeals were heard together and are being disposed by
     this common judgment and order.
3.   However, Civil Appeal No. 1121 of 2016 was argued as the lead
     appeal. Therefore, for the sake of convenience, we would refer to
     the facts of this appeal.
4.   This is an appeal by the revenue under Section 35L (1)(b) of the
     Central Excise Act, 1944 (referred to hereinafter as ‘the Central
     Excise Act’) against the order dated 16.04.2015 passed by the
     Customs, Excise and Service Tax Appellate Tribunal, West Zonal
     Bench at Mumbai (briefly ‘CESTAT’ hereinafter) in Appeal No.
     E/86389/13-Mum. (Jindal Drugs Limited Vs. Commissioner of Central
     Excise, Belapur).
     4.1. By the impugned order dated 16.04.2015, CESTAT has allowed
          the appeal filed by the respondent holding that as per Note 3
          to Chapter 18 of the Central Excise Tariff Act, 1985 (referred
          to hereinafter as ‘the Central Excise Tariff Act’), the activity of
          labelling amounted to manufacture and hence the activity of the
          respondent fell within the ambit of the definition of manufacture
          as per the said Note. Therefore, the respondent was eligible for
          availing the cenvat credit of the duty paid by its Jammu unit and
          was also eligible for rebate on the duty paid by it while exporting
          its goods. CESTAT further held that there was no suppression by
          the respondent and, therefore, the extended period of limitation
          was not available to the department (revenue).
5.   Though facts lie within a narrow compass, nonetheless it is necessary
     to make a brief reference to the relevant facts for a proper perspective.
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       5.1. Respondent is engaged in the business of exporting cocoa
            butter and cocoa powder. Its factory at Jammu manufactures
            cocoa butter and cocoa powder. Respondent has another unit
            located at Taloja in the State of Maharashtra. Cocoa butter
            and cocoa powder manufactured at Jammu are received by
            the respondent’s unit at Taloja. In the Taloja unit, respondent
            affixed two labels on two sides of the packages of the said
            goods received from its Jammu factory and cleared the same
            for export on payment of duty and claimed rebate of the duty
            paid on the exported goods. Further, respondent availed
            cenvat credit of the duty paid on those two goods at the time
            of clearance from Jammu. Respondent also imported cocoa
            butter and cocoa powder from China and Malaysia, receiving
            the same in its factory at Taloja.
       5.2. The factory of the respondent at Taloja was visited by officials
            of the appellant and it was found that the respondent was only
            putting labels on the goods brought from Jammu as well as on
            the imported goods. As the labels were already fixed on the
            boxes containing the two goods, additional labels affixed by
            the respondent did not amount to manufacture since affixing of
            additional label did not enhance the marketability of the goods
            which were already marketable.
       5.3. In such circumstances, appellant issued show cause cum
            demand notice dated 09.10.2012 to the respondent to show
            cause as to why the activity of labelling undertaken by the
            respondent on the product cocoa butter received from the
            Jammu unit and also on the imported goods should not be held
            as activities not amounting to manufacture in terms of Note 3
            to Chapter 18 of the Central Excise Tariff Act. It was alleged
            that respondent had wrongly availed cenvat credit amounting
            to Rs. 23,02,53,752.00 for the period from June, 2008 to July,
            2012 which should not be demanded and recovered under Rule
            14 of the Cenvat Credit Rules read with Section 11A(1) of the
            Central Excise Act (since renumbered as Section 11A (4) of the
            Central Excise Act with effect from 08.04.2011). It was further
            alleged that rebate claims amounting to Rs. 13,22,30,368.00
            for the period from June, 2008 to July, 2011, were erroneously
            sanctioned and utilised by the respondent which should not be
            demanded and recovered under Section 11A(1) of the Central
[2024] 5 S.C.R.                                                         275

     Commissioner of Central Excise Belapur v. Jindal Drugs Ltd.


           Excise Act (since renumbered as Section 11A(4) of the Central
           Excise Act with effect from 08.04.2011). Respondent was also
           called upon to show cause as to why interest at the appropriate
           rate on the cenvat credit wrongly availed of and utilised as
           determined and demanded should not be recovered from it
           under the provisions of Rule 14 of the Cenvat Credit Rules,
           2004 read with Section 11AB of the Central Excise Act (now
           Section 11AA of the said Act with effect from 08.04.2011).
     5.4. Respondent submitted written reply dated 08.02.2013 denying
          all the allegations made in the show cause notice.
     5.5. Following adjudication, the appellant vide the order in original
          dated 25.02.2013 held that cocoa butter received by the
          respondent at its Taloja unit from its unit at Jammu as well as
          the imported cocoa butter were already packed in corrugated
          boxes of 25Kg each. The exported cocoa butter was also in
          corrugated boxes of 25Kg each. Hence no repackaging activity
          was undertaken either on the goods received from the Jammu
          unit or on the imported cocoa butter. Appellant further held that
          the goods received from the Jammu unit already contained a
          label. On receipt of the goods at Taloja, two more labels on two
          sides of the carton were affixed. Appellant concluded that it was
          a case of additional labelling and not relabelling. Therefore, such
          labelling at Taloja did not amount to manufacture. After holding
          that Rule 3 of the Cenvat Credit Rules, 2004 (hereinafter referred
          to as ‘the Cenvat Credit Rules’) allows cenvat credit only in a
          case where the process undertaken amounts to manufacture,
          respondent held that the process of labelling undertaken by the
          respondent in its unit at Taloja did not amount to manufacture.
          Therefore, the cenvat credit availed of by the respondent was
          contrary to Rule 3 of the Cenvat Credit Rules. Hence, the
          credit of Rs. 23,02,53,752.00 availed of by it was irregular
          which was liable to be recovered under Rule 14 of the Cenvat
          Credit Rules read with Section 11A(1) of the Central Excise
          Act. Further, appellant held that the respondent had already
          utilised part of the irregular credit availed of and claimed rebate
          of Rs. 13,22,30,368.00 during the period from June, 2008 to
          July, 2012. As the credit availed of was irregular, the rebate
          sanctioned was erroneous since the respondent was not entitled
          to take the credit and to utilize the same. Therefore, it was held
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       that the erroneous refund of Rs. 13,22,60,368.00 was liable
       to be recovered on which the respondent was also liable to
       pay interest under Section 11AB/Section 11AA of the Central
       Excise Act. Proceeding further, appellant held that respondent
       had suppressed the information from the department that it
       was only undertaking labelling activity at its Taloja unit which
       did not amount to manufacture. Thus, with the intention to avail
       irregular credit, respondent had suppressed the information
       and claimed that the process undertaken by its unit at Taloja
       amounted to manufacture. Therefore, there was suppression
       of material fact with the intent to avail irregular credit. Hence,
       the respondent was held liable to pay penalty equivalent to
       the irregular credit availed of under Rule 15(2) of the Cenvat
       Credit Rules read with Section 11AC of the Central Excise Act.
       Thereafter, appellant passed the following order:
       1.   credit of Rs. 23,02,53,752.00 (Rupees twenty three crores
            two lakhs fifty three thousand seven hundred fifty two
            only) was wrongly availed and therefore demanded under
            provisions of Rule 14 of Cenvat Credit Rules read with
            Section 11A(4) (erstwhile Section 11A(1) of the Central
            Excise Act.
       2.   rebate of Rs. 13,22,30,368.00 (Rupees thirteen crores
            twenty two lakhs thirty thousand three hundred sixty
            eight only) sanctioned during the period from June 2008
            to July 2012 was erroneous as the duty on the exported
            goods were paid by utilizing the regularly availed credit
            which was not eligible to the assessee. Hence, the same
            was demanded under Section 11A(1)/Section 11A(4) of
            Central Excise Act.
       3.   interest at the appropriate rate under Rule 14 of the Cenvat
            Credit Rules read with Section 11AA (erstwhile Section
            11AB) of the Central Excise Act, was demanded on the
            irregular credit availed/erroneous rebate sanctioned.
       4.   penalty of Rs. 23,02,53,752.00 (Rupees twenty three
            crores two lakhs fifty three thousand seven hundred fifty
            two only) under the provisions of Rule 15(2) of Cenvat
            Credit Rules read with Section 11AC(1)(a) of the Central
            Excise Act was imposed. However, the penalty would be
[2024] 5 S.C.R.                                                            277

     Commissioner of Central Excise Belapur v. Jindal Drugs Ltd.


                reduced to 25% of the above amount if the assessee paid
                the duty determined along with interest within 30 days of
                receipt of the order. The reduced penalty of 25% of the
                amount of duty so determined would be available to the
                assessee only if the 25% of the penalty was also paid
                within the period of thirty days of receipt of the order.
                Otherwise, the penalty imposed under Section 11AC(1)
                (a) equal to the duty amount would remain.
     5.6. Aggrieved by the aforesaid order in original passed by the
          appellant, respondent preferred appeal before the CESTAT.
          After hearing the matter, both Judicial Member and Technical
          Member passed separate orders on 05.01.2015.
     5.7. In his order, the Judicial Member recorded that the respondent
          after clearing the goods in its Jammu unit, received the same in
          its factory at Taloja and claimed the benefit of notification No.
          56/2002-CE(NT) dated 14.11.2002. As per the said notification,
          the Jammu unit was entitled to refund of the duty paid whereas
          the Taloja unit was also entitled to avail cenvat credit of the
          duty paid by the Jammu unit. Judicial Member noted that after
          receiving the goods at Taloja, respondent affixed two labels on
          the packages on two different sides and thereafter exported the
          goods. After referring to the show cause cum demand notice,
          the Judicial Member opined that the only issue for consideration
          was whether the labelling/re-labelling or putting additional labels
          on the containers in the Taloja unit amounted to manufacture
          in terms of Note 3 to Chapter 18 of the Central Excise Tariff
          Act. As per Note 3, in relation to products of Chapter 18,
          labelling or re-labelling of containers or repacking from bulk
          packs to retail packs or the adoption of any other treatment to
          render a product marketable to the consumer shall amount to
          manufacture. Judicial Member opined that all the three activities
          are independent and separate. Note 3 to Chapter 18 is a deeming
          provision whereby the processes mentioned therein, if carried
          out, would amount to manufacture though there may not be any
          actual manufacture. In the above context, the Judicial Member
          held that activities of labelling or re-labelling of containers without
          enhancing marketability amounted to manufacture. A reading
          of Note 3 would clearly indicate that the activity of labelling
          or re-labelling of the containers amounted to manufacture.
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            Thereafter, it was held that both the Jammu unit and the Taloja
            unit of the respondent are separate units. Therefore, it could
            not be said that respondent was availing double benefit. The
            Taloja unit had rightly availed the cenvat credit of the duty
            paid at Jammu as well as the countervailing duty paid for the
            imported goods. Consequently, the rebate claim was correctly
            sanctioned to the respondent. Therefore, the respondent had
            rightly availed of the cenvat credit. Since the issue, whether the
            activity of labelling or re-labelling amounted to manufacture as
            per Note 3 to Chapter 18 of the Central Excise Tariff Act was
            related to interpretation of a statutory provision, question of any
            suppression or misrepresentation of fact by the respondent did
            not arise. Hence, question of getting the benefit of any extended
            period of limitation by the appellant for issuing show cause cum
            demand notice and thereafter passing adjudication order did
            not arise. In the above background, the Judicial Member set
            aside the order in original dated 25.02.2013.
       5.8. However, the Technical Member did not agree with the view
            taken by the Judicial Member. He held that no manufacture had
            taken place in the Taloja unit of the respondent both in respect
            of the goods manufactured at Jammu as well as the imported
            goods. He further held that the activity of the respondent in
            bringing the goods from Jammu to Taloja and thereafter to
            affix labels so as to avail the benefit of Note 3 to Chapter 18
            was not known to the department. Therefore, it was a case
            of misrepresentation of facts with the intent to avail rebate
            fraudulently. Consequently, the extended period of limitation
            was available to the department. That being the position, the
            Technical Member was of the view that the order in original was
            justified on all counts and dismissed the appeal.
       5.9. In view of the difference of opinion between the Judicial Member
            and the Technical Member, the matter was placed before the
            President of CESTAT to nominate a third member to resolve
            the same.
       5.10. Thereafter, pursuant to the order passed by the President,
             the matter was placed before the third member to resolve the
             difference of opinion between the Judicial Member and the
             Technical Member.
[2024] 5 S.C.R.                                                           279

     Commissioner of Central Excise Belapur v. Jindal Drugs Ltd.


     5.11. After hearing the matter, the third member passed the order
           dated 16.04.2015. Referring to Note 3 to Chapter 18, both prior
           to 01.03.2008 and post 01.03.2008, the third member noted that
           Parliament has consciously substituted the word ‘or’ in place of
           ‘and’ appearing between the words ‘labelling or re-labelling of
           containers’ and ‘repacking from bulk packs to retail packs’ to
           widen the scope of Note 3. According to the third member, any
           one of the three activities referred to in Note 3 i.e. (i) labelling
           or re-labelling, (ii) packing or repacking from bulk and retail
           packing and (iii) adoption of any other treatment to render a
           product marketable would be deemed to be manufacture. He
           held that the activity undertaken by the respondent at its Taloja
           unit i.e. labelling amounted to manufacture. He negated the
           stand of the revenue that labelling or re-labelling should enhance
           marketability of the goods as contrary to the plain reading of Note
           3. He, therefore, agreed with the Judicial Member that the activity
           of labelling undertaken by the respondent is covered by Note 3
           to Chapter 18 of the Central Excise Tariff Act which amounts to
           manufacture. Further, he also recorded a finding of fact based
           on the evidence on record that respondent had repacked the
           imported cocoa butter in new cartons and exported them after
           labelling. He thus fully concurred with the view expressed by
           the Judicial Member that the activity of labelling undertaken by
           the respondent amounted to manufacture in terms of Note 3 to
           Chapter 18 of the Central Excise Tariff Act. He also concurred
           with the view expressed by the Judicial Member that there was
           no suppression or misrepresentation of material fact by the
           respondent. Therefore, the extended period was not available
           to the revenue. He further held that the respondent is entitled
           to the credit of the duty paid on the goods received from the
           Jammu unit as well as credit of the countervailing duty paid on
           the imported goods. That being the position, he held that the
           credit and the rebate were rightly availed of by the respondent.
           Question of refund of the same did not arise. Further, no penalty
           can be imposed on the respondent.
     5.12. Following the opinion rendered by the third member, the matter
           was placed before the two-member Bench of CESTAT. In view
           of the majority decision, the appeal filed by the respondent was
           allowed vide the order dated 16.04.2015.
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6.     This Court by the order dated 08.02.2016 had issued notice.
       Thereafter, the appeal was admitted on 18.11.2019.
7.     Respondent has filed counter affidavit supporting the order of CESTAT
       and has sought for dismissal of the appeal. In response thereto,
       appellant has filed rejoinder affidavit reiterating the grounds urged
       in the appeal.
8.     Learned counsel for the appellant has laid great emphasis on the
       fact that the activity undertaken by the respondent at its Taloja unit
       i.e. putting labels on the two sides of the cartons which were already
       labelled at Jammu, cannot be said to be a manufacturing activity. Note
       3 to Chapter 18 of the Central Excise and Tariff Act cannot be read in
       a manner to hold that the activity of labelling amounted to manufacture.
       Learned counsel, therefore, contended that appellant was fully justified
       in passing the order in original. CESTAT was divided in its opinion
       as to whether such an activity could be termed as manufacture. The
       Technical Member had given good reasons as to why such an activity
       cannot be called manufacture while differing from the view taken by
       the Judicial Member. The third member has erred in concurring with
       the view taken by the Judicial Member. He, therefore, submits that the
       order passed by the CESTAT by way of majority should be interfered
       with and order in original should be restored.
9.     Mr. V. Sridharan, learned senior counsel in his brief submission
       referred to Note 3 to Chapter 18 of the Central Excise Tariff Act,
       both prior to its amendment with effect from 01.03.2008 and post
       amendment. According to him, Parliament has consciously replaced
       the word ‘and’ by the word ‘or’ and post amendment, it is clear that
       the activity of labelling or re-labelling amounted to manufacture. He,
       therefore, supports the decision of the CESTAT and seeks dismissal
       of the appeal.
10. Submissions made by learned counsel for the parties have received
    the due consideration of the Court.
11. The core issue to be considered is whether the activity of labelling
    carried out by the respondent amounts to manufacture? While
    contention of the appellant is that the same does not amount to
    manufacture, on the other hand according to the respondent, as
    per Note 3 to Chapter 18 of the Central Excise Tariff Act, the above
    activity amounts to manufacture.
[2024] 5 S.C.R.                                                              281

     Commissioner of Central Excise Belapur v. Jindal Drugs Ltd.


12. The Central Excise Act which has since got subsumed in the Central
    Goods and Services Tax Act, 2017 was enacted to provide for levy
    of central duties of excise on goods manufactured or produced in
    India and for matters connected therewith or incidental thereto.
     12.1. Section 2 is the definition clause. ‘Manufacture’ is defined in
           Section 2(f) which reads as follows:
           “manufacture” includes any process,-
           (i)    incidental or ancillary to the completion of a
                  manufactured product;
           (ii)   which is specified in relation to any goods in the
                  Section or Chapter notes of the First Schedule to the
                  Central Excise Tariff Act (5 of 1986) as amounting
                  to manufacture; or
           (iii) which, in relation to the goods specified in the Third
                 Schedule, involves packing or repacking of such
                 goods in a unit container or labelling or re-labelling
                 of containers including the declaration or alteration of
                 retail sale price on it or adoption of any other treatment
                 on the goods to render the product marketable to
                 the consumer,
                  and the word “manufacturer” shall be construed
                  accordingly and shall include not only a person who
                  employs hired labour in the production or manufacture
                  of excisable goods, but also any person who engages
                  in their production or manufacture on his own account;
     12.2. Therefore, the word ‘manufacture’ includes any process which
           is incidental or ancillary to the completion of a manufacture
           product; any process which is specified in relation to any goods
           in the Section or Chapter notes of the First Schedule to the
           Central Excise Tariff Act as amounting to manufacture; or any
           process which in relation to the goods specified in the Third
           Schedule involves packing or repacking of such goods in a unit
           container or labelling or re-labelling of containers including the
           declaration or alteration of retail sale price on it or adoption
           of any other treatment on the goods to render the product
           marketable to the consumer.
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13. Chapter 18 of the Central Excise Tariff Act deals with cocoa and cocoa
    preparations. Note 3 to Chapter 18 has undergone amendment with
    effect from 01.03.2008. Prior to the amendment, Note 3 to Chapter
    18 read as under:
       In relation to products of this Chapter, labelling or re-labelling of
       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’.
       13.1. Post 01.03.2008, Note 3 now reads as follows:
            In relation to products of this Chapter, labelling or re-labelling of
            containers or 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’.
       13.2. Thus by way of the amendment, the word ‘and’ has been
             replaced by the word ‘or’ between the expressions ‘labelling
             or re-labelling of containers’ and ‘repacking from bulk packs
             to retail packs’. Prior to 01.03.2008, the legislative intent was
             quite clear. The process to constitute manufacture should either
             be labelling or re-labelling of containers and repacking from
             bulk packs to retail packs. This process was construed to be
             one whole. In other words, the activity should not only include
             labelling or re-labelling of containers but the same should relate
             to repacking from bulk packs to retail packs. This was one
             activity. The other activity was adoption of any other treatment
             to render the product marketable to the consumer. Therefore,
             the legislature was quite clear that if either of the two processes
             were followed, the same would amount to manufacture.
       13.3. However, after the amendment i.e. post 01.03.2008, Note 3
             has undergone a change as indicated above. Now because of
             substitution of the word ‘or’ in place of the word ‘and’ between
             the two expressions ‘labelling or re-labelling of containers’ and
             ‘repacking from bulk packs to retail packs’, the earlier composite
             process of labelling or re-labelling of containers and repacking
             from bulk packs to retail packs has been split up into two
             independent processes. Labelling or re-labelling of containers
             is one process and repacking from bulk packs to retail packs
             has now become another process. Therefore, instead of two
[2024] 5 S.C.R.                                                          283

     Commissioner of Central Excise Belapur v. Jindal Drugs Ltd.


           activities, Note 3 now contemplates three activities. As pointed
           out above, the composite activity of labelling or re-labelling of
           containers and repacking from bulk packs to retail packs has
           been split up into two activities i.e. labelling or re-labelling of
           containers is one and the other is repacking from bulk packs to
           retail packs. The other activity of adopting any other treatment
           to render the product marketable to the consumers remains the
           same. Therefore, Note 3, post amendment, as it exists today
           contemplates three different processes; if either of the three
           processes are satisfied, the same would amount to manufacture.
           The three processes are:
           (i)    labelling or re-labelling of containers; or
           (ii)   repacking from bulk packs to retail packs; or
           (iii) the adoption of any other treatment to render the product
                 marketable to the consumer.
     13.4. As already observed above, if any one of the above three
           processes is satisfied then the same would amount to
           manufacture.
14. We have already noticed the definition of ‘manufacture’ in the Central
    Excise Act. Any one of the processes indicated in Note 3 to Chapter
    18 of the Central Excise Tariff Act would come within the ambit of
    the definition of ‘manufacture’ under Section 2(f)(ii) of the Central
    Excise Act.
15. There is no factual dispute as to the activity carried out by the
    respondent at its Taloja unit. Whether the goods are brought from
    the Jammu unit or are imported, those are relabelled on both sides
    of the packs containing the goods at the Taloja unit of the respondent
    and thereafter, introduced in the market or sent for export. In terms
    of Note 3 to Chapter 18, this process of re-labelling amounts to
    ‘manufacture’.
16. That being the position, we are of the considered opinion that the
    view taken by CESTAT is the correct one and no case for interference
    is made out. This is because all the other aspects are related and
    hinges upon the core issue. Resultantly, the impugned order of
    CESTAT dated 16.04.2015 is affirmed and the appeal by the revenue
    is dismissed.
284                                                     [2024] 5 S.C.R.

                        Digital Supreme Court Reports


17. In view of the above decision, Civil Appeal Nos. 788-790 of 2022
    would also stand dismissed.
18. However, there shall be no order as to costs.

       Headnotes prepared by:                          Result of the case:
       Prastut Mahesh Dalvi, Hony. Associate Editor    Appeals dismissed
       (Verified by: Abhinav Mukerji, Sr. Adv.)