Customs, Excise and Gold Tribunal - Delhi
Cce vs Avon Beauty Products (I) Pvt. Ltd. on 14 August, 2002
Equivalent citations: 2002(105)ECR624(TRI.-DELHI)
ORDER G.R. Sharma, Member (T)
1. Revenue has filed this appeal being aggrieved by the order passed by the Ld. Commissioner (Appeals). Ld. Commissioner (Appeals) in the impugned order has observed As the samples put up before me show that the label affixed by the appellants on the package do not contain all the details which are needed to be put up on 'labels', I do not consider that the activity undertaken by the appellants can be covered under Chapter Note 4 of Chapter 33 to constitute "manufacture" for the purpose of levy and collection of duty of excise and the imported goods. Hence, I allow the appeal.
2. The facts of the case briefly stated are that the respondent herein are engaged in the import and marketing of cosmetics. They are re-labeling these products in their warehouse. Central Excise Officers alleged that the activity of labeling/re-labeling of the said cosmetics amounted to manufacture of an excisable commodity which were being sold without being cleared by Central Excise Department and without payment of Central Excise Duty. The Addl. Commissioner confirmed the demand and imposed a penalty when the importer filed an appeal before the Commissioner (Appeals). He held as indicated above.
3. Arguing the case for Revenue Shri M.M. Dubey, Ld. DR submits that in terms of Note 4 of Chapter 33 it has been set out that In relation to products of heading Nos. 33.03, 33.04 and 33.05 conversion of powder into tablets, labeling or relabellling of containers intended for consumers or repacking from bulk packs to retail packs or the adoption of any other treatment to render the product marketable to the consumer, shall be construed as manufacture.
4. He submits that the fact remains that in the instant case the respondents herein are fixing label on the cartons in which the cosmetics are imported. He submits that the labelling or relabelling according to the aforesaid chapter note amounts to manufacture. He, therefore, submits that since the activity amounts to manufacture, therefore, duty becomes payable which the respondents herein did not pay. He, therefore, submits that the Commissioner (Appeals) fell into error by holding that no duty was payable.
5. Ld. Dr submits that the Addl. Commissioner has rightly held that duty is payable. He reiterates the findings of the Ld. Addl. Commissioner and prays that the appeal may be allowed.
6. Shri B.L. Narasimhan, Ld. Counsel submits that no doubt a level is affixed on the cosmetics. He submits that the common thread in the earlier processes described in the chapter note 'conversion' of powder into tablet, labelling or re-labelling of container was that the processes were for the convenience of the customer. Repacking from the bulk packs to retail packs help the consumer in using the product. The activity carried out by them did not fall within this category, hence they would not be covered by the Chapter Note. He submitted that the subject goods could be marketed even without the information required under the Standards of weight & Measures Act on the packages and that it cannot be said that not following the legal requirement would make the products non-marketable. Ld. Counsel submits that similar issue came up before the Tribunal in the case of CCE v. Panchsheel Soaps Factory. The tribunal in para 5 of its order observed as under:
5. The respondents in the present case, admittedly are only pasting the sticker on the packing of the imported soap to indicate the name of the importer and the MRP which is the requirement under the Standards of Weights and Measures Act. Simply putting a sticker, in our view, will neither amount to labelling or relabelling, the process which have been deemed to be a process of manufacture by Note 6. It is not the case of the Revenue that the label has been replaced a new label or any label has been pasted over the existing level. Accordingly, it cannot be claimed that the process undertaken by the Appellants amounts either to labelling or relabelling. The Central Board of Excise & Customs has taken the same view in respect of imported finished medicines which were sold after pasting sticker on the cartons of the imported item in view of the requirement of the Drugs and Cosmetics Act without altering any information originally contained in the packet. The Board clarified that Note 5 to Chapter 30 may not be attracted in such a situation. Note 5 to Chapter 30 is para meteria to Note 6 to Chapter 34. Accordingly, we do not find any infirmity in the impugned order and therefore, reject the Appeal filed by the Revenue.
7. Ld. Counsel, therefore, submits that the facts of this case are identical to that decided by the Tribunal in the case of Panchsheel Soap Factory. He, therefore, submits that the ratio of that decision squarely covered the case of the appellant and prays that the appeal of Revenue may be rejected.
8. We have heard the rival submissions. We have also perused the Chapter Note relied upon by both the sides as also the case law cited by the respondent. We note that the facts in the present case are similar to those leading to the decision in the case of Panchsheel Soap Factory. Following the ratio of this decision we hold that there is no need to interfere with the impugned order. The impugned order is, therefore, upheld and the appeal filed by Revenue is rejected.
(Pronounced in the open Court)