Supreme court upholds CESTAT view that the process of labeling/ re labeling, packing / re-packing amounts to “manufacturing”.

Case title: Commissioner of central excise Belapur V. Jindal Drugs Ltd

Case no: Civil appeal No. 1121 of 2016 and 788-790 of 2022

Dated on: 30th April, 2024

Quorum: Justice Abhay S. Oka and Justice Ujjal Bhuyan

Facts of the Case:

This is an Appeal against the Order dated 16.04.2015 passed by Customs Excise and Service Tax Appellate Tribunal (CESTAT) against Appeal No.E/86389/13-Mum . The 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. The Cocoa butter 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 goods received from its Jammu factory and had 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 which was received at Taloja. The factory of the respondent at Taloja was visited by the officials of the appellant and it was found that the respondent was not only putting labels on the good bought from the Jammu unit but also was putting labels on the imported goods. As the labels were already fixed on the boxes containing the two goods additional labels affixed did not amount to manufacture as the additional labels affixed would not enhance the marketability of the goods which were already marketable. The appellant then issued a show cause notice to the respondents on 09.10.2012 to show cause as to why activity of labelling undertaken by the respondent on the product received from the Jammu unit and also on the imported goods are not to be held as activity of manufacturing in the terms of Note 3 chapter 18 of the Central Excise Tariff Act. It was alleged that the respondent had wrongly availed cenvat credit amounting to Rs. 23,02,53,752/. from the period of June, 2008 to July 2012. It was also alleged that the rebate amounting to Rs. 13,22,30,368 from the period of June, 2008 to July, 2011 was erroneously sanctioned. Thereafter, hearing the respondent, appellant passed an order on 25.02.2013 that the cenvat credit availed was irregular and the rebate sanctioned was erroneous thereby, the respondent was made liable to refund the credit availed for Rs. 23,02,53,752/- and a rebate of Rs. 13,22,30,368/- along with interest and penalty of 23,02, 53,752/- However, the penalty could be reduced to 25%, if the assessee paid the duty within 30 days of order.  The Respondent preferred appeal before CESTAT. After hearing the matter CESTAT passed an order dated 16.04.2015 by stating that activity undertaken by respondent is covered by Note 3 to chapter 18 which amounts to manufacture and that there was no suppression or misrepresentation of the material fact by the respondent. That being the position the cenvat credit and the refund availed by the respondent was right and hence no penalty could be imposed. Aggrieved by the same, the appellant has now preferred appeal.

Contentions of the Appellant:

The activity undertaken at the Taloja unit i.e; putting labels on both the sides of the cartons that were labelled at Jammu is not a manufacturing activity. Note 3 to chapter 18 Central Excise Tariff Act cannot be read in the manner that the activity of the labelling amounted to manufacture. The Technical Member of CESTAT had given a good reason to why such an activity cannot be considered as a manufacturing activity.

Contentions of the Respondent:

In Note 3 chapter 18 of the Central Excise Tariff Act, Parliament has consciously replaced the word ‘and’ by the word ‘or’, vide amendment dated 01.03.2008, thereby making it clear that the activity of labelling or re-labelling amounted to “manufacture”.

Legal Provisions:

Section 11A (1) of the central excise act- deals with recovery of duties not levied or paid or short-levied or short-paid or erroneously refunded.

Rule 14 of Cenvat credit rules 2004- credit has been taken wrongly or erroneously refunded.

Rule 3 of cenvat credit rules- A manufacturer or producer of final products shall be allowed to take credit.

Note 3 Chapter 18 Central Excise Tariff Act


Whether the activity of labelling amounts to manufacture?

Courts Analysis and Judgement:

Supreme court examined the definition of “manufacture” under Section 2(f)(ii) under Central excise Act “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;

Therefore, the word ‘manufacture’ includes any process which is incidental or ancillary to the completion of a manufactured product; any process specified in Section or chapter notes of the first schedule to the Central Excise Tariff Act or any process in relations to goods specified in 3rd schedule which involves packing or re-packing, labelling or re-labelling, declaration or alteration of retail sales price or adoption of any other treatment on the goods to render the product marketable. Further, post-amendment of 01.03.2008 to Note 3 to chapter 18 of the Central Excise and Tariff Act, “manufacture” contemplates any of the three processes. The three process 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.

If any one of the above three processes is satisfied then the same would amount to “manufacture” under Section 2 (f) (ii) of the Central Excise Act.

There is no dispute as to the activity carried out by the respondent at the Taloja unit. Whether the goods are brought from Jammu or are imported, those re-labelled on both the sides of the pack containing the goods at the Taloja unit and thereafter, introduced in the market or sent for exports, in terms of Note 3 to the chapter 18 this process of re-labelling amounts to “manufacture”. The view taken by the CESTAT is correct and no case for interference is made out. Accordingly, the civil appeal 788-790 of 2022 stands dismissed.

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Judgement reviewed by- Parvathy P.V.

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Allegations of Illegal Eviction Remain Unresolved: Supreme Court

Case title: Sanjay Maruti Jadhav v. Amit Tatoba Sawant

Case no: Civil appeal No. 72 of 2012

Dated on: April 26,2024

Quorum: Justice Vikram Nath.

Facts of the case:
A Leave and License Agreement was entered between the Appellants and the Respondent. The Appellants are the owners of the property, which was the subject matter of the Suit. The Respondent herein had filed Suit against the Appellant for illegal and unauthorized eviction from the Suit Schedule property which was decreed by the Trial Court and further concurred by the High Court as well. Appellant, aggrieved by the Orders of the High Court, preferred Civil Appeal wherein the Supreme Court had reserved the matter for orders on 18.01.2024. The Supreme Court, left it open for the parties to move appropriate application within a period of two weeks, in case there is any probability for settlement. However, as three months elapsed and since no such application was filed, the Hon’ble Supreme Court proceeded to decide the matter on merits.
Contentions of the appellant:
The Appellants contended that the Suit under Section 6 of The Specific Relief Act not being maintainable. The subject property was handed over voluntarily by the Respondent and to prove the said contention the Appellant relied on the Possession Receipt.
Contentions of the respondent:
The Respondent filed a suit, within six months of dispossession, under Section 6 of the Specific Relief Act, 1961 by alleging that they were illegally and unauthorizedly by use of force, evicted by the Appellant.
Whether any merit is there in the Appeal preferred and whether any interference is required?
Legal Provisions:
Section 6 of the Specific Relief Act: Suit by person disposed of immovable property.
Courts judgement and analysis:
The Trial Court decreed the suit of the Respondent disbelieving the contentions of the Appellants that the subject property was handed over voluntarily by the Respondent thereby not talking into consideration the possession receipt relied upon by the Appellant. The Trial Court rejected the appellant’s plea of non-maintainability of the suit under Section 6 of the Specific Relief Act. Appellant, aggrieved by the decision preferred a Revision Petition before the High Court, which was also dismissed. The High Court also found that the plea of maintainability of the suit raised by the appellant was devoid of merits and further concurred with the finding of the Trial Court that the Respondent was illegally dispossessed by the Respondent. The Appeal is accordingly dismissed as there are concurrent findings, based upon the evidence on record and findings of fact.

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Judgement reviewed by- Parvathy P.V.

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“Supporting Such Relationships Will Bring Chaos To Society”: Allahabad High Court Denies Live-In Couple’s Request For Protection Involving Married Adults

Case Title:- Raksha And Another Versus State Of Up And 4 Others

Case No :- WRIT – C No. – 1546 of 2024

Quorum: Hon’ble Justice Mrs. Renu Agarwal

Facts of the case:

Renu Agarwal, J. stated that petitioner 1 is living with petitioner 2 in a live-in relationship after having a legally wedded husband without filing for divorce from a court of competent jurisdiction. This was stated in a writ petition filed to direct the police authorities to provide police protection to petitioners against the husband and parents of petitioner 1. Petitioners stated that petitioner 1’s parents had married her off while she was a minor, 13 years old. Because petitioner 1’s marriage is null and void, she freely chooses to live in union with petitioner 2 against her will. The state has argued that petitioner 1 is already married, that her marriage has not been ruled unlawful by a court of competent jurisdiction, and that the court cannot accept a live-in relationship between her and petitioner 2.


The petitioners sought police protection against interference in their live-in relationship and from the family of one petitioner. They also requested direction for the family not to interfere in their relationship. The petitioners argued that one petitioner was married at a young age, but the marriage was invalid, and she was voluntarily in a live-in relationship with the other petitioner

The respondent argued that one of the petitioners was already legally married and living in a live-in relationship with the other petitioner, which the court cannot support. The respondent cited a previous court decision disapproving of such relationships and emphasized that protecting illegal relationships would disrupt societal norms. The court dismissed the petition, stating that endorsing illicit relations through protection would be detrimental to societal values and clarified its stance against illegal relationships while not opposing live-in relationships in general.

Court Analysis and Judgement:

The court dismissed the writ petition seeking police protection for a couple in a live-in relationship, if they protect illegal relationships then it will create chaos in the society .If court grant permission for protection it indirectly supports illegal relationships. The court does not deem it proper to permit the parties to such illegality as tomorrow petitioners may convey that this court sanctified their illicit relations. Living in live in relationship cannot be at the cost of social fabric of this country. It is clarified that this court has not been against live in relationship but us it is against illegal relations. Granting protection might indirectly approve of unlawful relationships, which the court cannot be done. The court clarified its sentence against illegal relationships while not being opposed to live-in relationships in general. The petitioners, one of whom was legally married, had not sought a divorce, making their live-in arrangement unlawful under Hindu Law, highlighting the importance of upholding legal relationships and the sanctity of marriage.

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Judgement Analysis Written by – K. Immey Grace

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Intellectual Property Rights in the Film Industry


Intellectual Property Rights (IPR) play a crucial role in protecting the creative works of individuals and entities within the film industry. This sector thrives on innovation, storytelling, and artistic expression, making the safeguarding of intellectual property essential for sustaining the industry’s growth. Intellectual Property Rights (IPR) are the cornerstone of protection for the dynamic and creative landscape of the film industry. With its foundation rooted in innovation, storytelling, and artistic expression, the film sector relies on IPR to ensure the preservation and growth of its valuable intellectual assets.

Copyright Protection in Film:

One of the primary forms of IPR in the film industry is copyright protection. Filmmakers obtain copyright for their works to prevent unauthorized reproduction, distribution, and public display. This protection extends to various elements, including the screenplay, music, cinematography, and overall storyline.[1]

Comprehensive Coverage: Copyright extends to various elements of a film, encompassing the screenplay, dialogue, music, characters, cinematography, and other creative components.

Originality Requirement: To qualify for copyright protection, the elements must exhibit a sufficient level of originality, demonstrating the creator’s creative input.

Registration and Enforcement of Copyright:

Registration Process: Filmmakers can register their works with copyright offices to establish a public record of ownership. This process facilitates legal action in case of infringement.

Enforcement Mechanisms: Legal avenues, including cease and desist orders and damages, provide means for copyright owners to enforce their rights. Litigation may be pursued to protect against unauthorized use.

Duration and Limitations:

 Duration of Copyright: The duration of copyright protection for films is typically the life of the creator plus a set number of years (e.g., 70 years). After this period, the work enters the public domain.

 Limitations on Copyright: Certain limitations, such as fair use, allow for the use of copyrighted material under specific circumstances, such as criticism, commentary, news reporting, teaching, and research. Understanding these limitations is crucial for navigating the legal landscape.

In essence, copyright protection in film is broad, covering a myriad of creative elements, and its effectiveness is contingent on proper registration and vigilant enforcement. The duration of copyright ensures creators are granted exclusive rights for a reasonable period, while limitations strike a balance between protection and the public’s interest in accessing and using creative works.

Script and Screenplay Protection:

Automatic Protection: Scripts and screenplays are automatically protected by copyright as soon as they are fixed in a tangible medium. This protection includes the expression of ideas, characters, and dialogue.

Creative Ownership: The copyright for scripts grants exclusive rights to the scriptwriter, allowing them to reproduce, distribute, perform, and display their work.

Legal Challenges in Script Protection:

Proving Originality: One challenge lies in establishing the originality of a script, especially in cases where similarities exist with other works. This may involve demonstrating a unique creative expression beyond common tropes.

Unauthorized Use: Scriptwriters may face challenges when others use their ideas without permission. Differentiating between inspired works and unauthorized copying can be legally intricate.[2]

 Case Studies: Script Copyright Disputes:

 Sherlock Holmes Adaptations:  Notable disputes involve adaptations of Arthur Conan Doyle’s Sherlock Holmes stories. Copyright issues arose over whether certain elements were still protected or in the public domain.

Harlan Ellison vs. James Cameron:  Ellison filed a lawsuit against James Cameron, claiming that the movie “The Terminator” infringed on his works. The case highlighted the importance of establishing a causal connection between the original work and the alleged infringement. In summary, script and screenplay protection involves the automatic grant of copyright, but legal challenges often revolve around proving originality and addressing unauthorized use. Examining case studies provides insights into the complexities and nuances of script copyright disputes within the film industry.[3]

Music and Soundtrack Rights:

 Licensing Process:  Securing music for films involves obtaining licenses from composers, artists, and record labels. This process ensures the legal use of copyrighted music in sync with the visual elements of the film.

Copyright Ownership: Both the composition (musical notes and lyrics) and the sound recording have separate copyrights. Filmmakers often need to acquire licenses for both aspects.

Negotiations with Composers and Labels:

Composer Agreements: Negotiations with composers entail defining the terms of collaboration, compensation, and the scope of rights granted to the filmmaker. Clear agreements are crucial to avoiding disputes later on.

Label Agreements: When using existing sound recordings, negotiations with record labels involve licensing the rights to use the specific recording in the film. Terms may include duration, territory, and financial arrangements.

 Legal Issues in Music Rights:

Infringement Claims: Filmmakers may face legal challenges if their use of music is deemed to infringe on existing copyrights. Thorough clearance and licensing processes are vital to mitigate the risk of infringement claims.

Royalty Payments: Understanding royalty obligations is crucial. Some agreements involve ongoing royalty payments based on the film’s performance, and compliance with these terms is essential to avoid legal repercussions. In conclusion, navigating the realm of music and soundtrack rights in the film industry requires a meticulous licensing process, clear negotiations with composers and labels, and a keen awareness of potential legal pitfalls. Addressing these aspects ensures that the musical elements enhance the cinematic experience without running afoul of copyright laws.[4]

 Digital Rights Management (DRM):

It is a technology used in the film industry to control access to digital content. It involves the implementation of various measures to protect intellectual property, prevent unauthorized distribution, and safeguard the economic interests of filmmakers. DRM aims to prevent piracy and unauthorized sharing of digital content, ensuring that filmmakers and content creators retain control over how their work is accessed and distributed. This technology is crucial for maintaining the economic viability of the film industry. Explore aspects of DRM, including encryption, access controls, and digital watermarks. These mechanisms are designed to restrict access to content, limit copying, and trace unauthorized distribution. Discuss the challenges and criticisms associated with DRM, such as potential limitations on user rights, inconvenience for legitimate consumers, and the cat-and-mouse game between content providers and those attempting to circumvent DRM protection.

Distribution Agreements:

Film distribution agreements play a pivotal role in the entertainment industry, encompassing various legal aspects that shape how films are disseminated to audiences. Territorial rights are a cornerstone, delineating the geographic regions where the distributor has the exclusive right to exhibit the film. This ensures effective market segmentation and maximizes revenue potential in different regions. The surge in online streaming platforms introduces complexities, necessitating clauses that define digital distribution rights. Distribution agreements often specify whether the film will be available on specific streaming services and address revenue-sharing models. Exclusivity clauses are critical, defining the duration and scope of exclusive distribution rights granted to the distributor. This could involve exclusivity in a particular market, platform, or timeframe. These agreements navigate a delicate balance, ensuring filmmakers achieve widespread exposure while distributors secure a profitable and protected investment in the dynamic landscape of film distribution.


In conclusion, the landscape of Intellectual Property Rights (IPR) in the film industry is a multifaceted terrain where legal frameworks serve as the cornerstone for creativity, protection, and economic sustainability. Copyright laws stand as stalwarts, safeguarding scripts, screenplays, and audiovisual works, while the Fair Use Doctrine injects flexibility into the industry. Trademark protection extends to film titles, and licensing agreements become linchpins, enabling filmmakers to harness external elements. Characters find protection under copyright and trademark, emphasizing the industry’s commitment to preserving creative assets. Patents delve into technological innovations, and Digital Rights Management (DRM) emerges as a crucial shield against piracy, securing economic interests. Distribution agreements, on the other hand, intricately weave through territorial rights, online streaming, and exclusivity clauses, ensuring a delicate equilibrium between market segmentation and global reach. These legal constructs not only reflect the industry’s evolution but also underscore its adaptability in the face of digital disruptions. As the film industry continues to evolve, the interplay of intellectual property rights and legal frameworks will remain instrumental, shaping the trajectory of creativity, protecting investments, and fostering a thriving cinematic ecosystem.

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Written By: Gauri Joshi

[1] https://www.legalserviceindia.com/copyright/Cinematograph-Films.htm

[2] https://www.legalline.ca/legal-answers/protecting-songs-scripts-and-film-or-tv-ideas/   

[3] https://www.giantfreakinrobot.com/ent/the-terminator-ripped-off-sci-fi-writers.html

[4] https://www.yourlegalcareercoach.com/music-law-framework-in-india-an-overview/

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