Custom, Excise & Service Tax Tribunal
Beri Mercurio Limited vs Daman on 13 November, 2018
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL,
West Zonal Bench, Ahmedabad
Appeal No. E/113/2007-DB
(Arising out of OIA No. KS/355/DAMAN/2006 dated 10.10.2006 passed by
Commissioner of Central Excise, Customs and Service Tax-DAMAN)
Beri Mercurio Ltd. - Appellant
Vs.
C.S.E. & S.T.- Daman - Respondent
Represented by:
For the appellant : Shri Rahul Gajera, Advocate For the respondent : Shri T.G. Rathod, Jt. Commr., (AR) CORAM:
Hon'ble Mr. Ramesh Nair, Member (Judicial) Hon'ble Mr. Raju, Member (Technical) Date of Hearing: 24.10.2018 Date of Decision: 13.11.2018.
ORDER NO. A/12577 / 2018 Per: Raju This appeal has been filed by M/s. Beri Mercurio against confirmation of demand of Central Excise and imposition of penalty.
2. Ld. Counsel for the appellant pointed out that they received mercury and after certain purification process, the same is cleared by them. He argued that a Show Cause Notice was issued to them alleging that they are engaged in repacking of the mercury. It was argued that repacking of mercury amounts to manufacture in terms of note 10 of Chapter 28 of the Central Excise Tariff Act. He said note 10 of chapter 28 reads as follows:
"In relation to products of this Chapter, labeling or relabeling of containers and repacking from bulk packs to retail packs or the 2 E/113/2007-DB adoption of any other treatment to render the product marketable to the consumer, shall amount to manufacture."
2.1 Ld. Counsel argued that there is no charge that the appellant's are engaged in labeling or relabeling of the product. He further argued that another Show Cause Notice was issued to the appellant for the seizure part which also involved demand of duty. Ld. Counsel argued that the other Show Cause Notice issued in the same proceedings was confirmed by the original Adjudicating Authority, however, the entire proceeding in that Show cause notice was set aside by the Commissioner (A). He pointed out that the order-in-appeal was accepted by the Revenue. He further argued that the Show Cause Notice in the impugned proceedings is identical to the Show Cause Notice in the earlier proceedings relating to seizure. He argued that since in identical proceeding the demand has been dropped, in this proceeding the same should also be dropped.
2.2 Ld. Counsel relied on the decision by Hon'ble Apex Court in the case of Vadilal Gases 2017(346) ELT 161 (SC) to assert that simple purification of the item does not amount to manufacture.
3. Ld. AR relies on the impugned order. He argued that decision of Commissioner (A) in seizure-cum-demand proceedings has been amply distinguished in the impugned order. He argued that the earlier order of Commissioner (A) was based on certain wrong facts. Ld. AR further pointed out that the appellant's assertion that there was no repacking from bulk containers to small containers is misplaced as a report of the superintendent indicates that the appellant was receiving mercury in bulk packs of 150 to 250 kgs each. Whereas they were clearing the mercury in the pack of 34.5 kgs each.
3 E/113/2007-DB
4. We have gone through rival submissions. We find that Hon'ble Apex Court in the case of Johnson & Johnson Ltd. 2005 (188) ELT 467(S.C.) has interpreted an identically worded note 5 to chapter 30 which reads as under:
"2. Note 5 Chapter 30 has extended the meaning of „manufacturers‟ and reads as follows :
"In relation to products of Heading No. 30.03, conversion of powder into tablets or capsules, labelling or relabelling of containers intended for consumers 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."
After examining the said chapter note the Hon'ble Apex Court's observation as follows:
6. What has been overlooked by the appellant is that merely packing for being marketed would not do. The repacking would have to be from bulk packs to "retail packs" so as to render the product marketable directly to the consumer. There is no evidence relied upon by the appellants to the effect that the cardboard boxes in which the units were placed or the thermocole containers were "retail packs".
Further interpreting the decision of Johnson & Johnson Ltd. (supra), the Hon'ble Apex Court's decision in the case of BOC India Ltd 2008 (226) ELT 323 (S.C.) observed as follows:
"6. In the case of Commissioner of Central Excise, Mumbai v. Johnson & Johnson Ltd. reported in 2005 (188) E.L.T. 467 (S.C.), a two Judge bench of this Court while interpreting Note 5 of Chapter 30 which is similar to Note 10 of Chapter 28 held that mere packing for marketing would not amount to manufacture. That mere labeling or relabeling in the absence of any activity of repacking from bulk packs to retail packs would not render the product marketable directly to the consumer. It was observed in para 6 as under :
"What has been overlooked by the appellant is that merely packing for being marketed would not do. The repacking would have to be from bulk packs to "retail packs" so as to render the product marketable directly to the consumer.
There is no evidence relied upon by the appellants to the effect that the cardboard boxes in which the units were placed or the thermocole containers were "retail packs".
In the instant case also while there is a charge that the goods were repacked from bulk to smaller packing but there is no charge that there 4 E/113/2007-DB was any labeling or relabeling done. In absence of the change of labeling or relabeling simply repacking from bulk to small containers, as charged in the Show Cause Notice would not amount of manufacture. In view of above the demand itself does not survive. The appeals are therefore, allowed.
(pronounced in the open Court on 13.11.2018.) (Raju) (Ramesh Nair) Member (Technical) Member (Judicial) DS