Custom, Excise & Service Tax Tribunal
United Distributors vs Cce Thane I on 30 July, 2014
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, WEST ZONAL BENCH AT MUMBAI
COURT NO. II
APPLICATION NO. E/S/98515/13
IN APPEAL NO. E/89059/13 Mum
Arising out of Order-in-Original No. 04/ANS-04/United/Th-I/2013 dated 22.08.2013 passed by the Commissioner of Central Excise (Appeals), Thane I.
For approval and signature:
Honble Shri Ashok Jindal, Member (Judicial)
Honble Shri P.S. Pruthi, Member (Technical)
1. Whether Press Reporters may be allowed to see : No
the Order for publication as per Rule 27 of the
CESTAT (Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the :
CESTAT (Procedure) Rules, 1982 for publication
in any authoritative report or not?
3. Whether Their Lordships wish to see the fair copy : Seen
of the Order?
4. Whether Order is to be circulated to the Departmental : Yes
authorities?
United Distributors
:
Appellant
Versus
CCE Thane I
Respondent
Appearance Shri J.H. Motwani, Advocate for appellant Shri V.K. Agarwal, Addl. Commissioner (A.R.) For Respondent CORAM:
Shri Ashok Jindal, Member (Judicial) Shri P.S. Pruthi, Member (Technical) Date of Hearing : 30.07.2014 Date of Decision : 30.07.2014 ORDER NO.
Per Ashok Jindal The appellant is in appeal along with an application for stay against the impugned order wherein the duty demand of Rs.1,23,29,946/- has been confirmed along with interest and equivalent amount of penalty. Redemption fine of Rs.1 crore has also been imposed on the appellant.
2. Brief facts of the case are that the appellant is engaged in the activity of importing and trading of goods like perfumes, shampoos, body spray, fruit juice based drinks etc. falling under Chapters 15, 18, 19, 20, 21, 22, 33 and 85 of the Central Excise Tariff Act, 1985 (CETA 85). The goods imported by the appellant are required to pay duty on MRP basis as per Section 3 of the CETA 85. As the appellant was fixing sticker in their warehouse after clearance of the goods by discharging duty on the basis of MRP less abatement, the Revenue issued a show-cause notice to the appellant on the premise the activity of fixing stickers amount to manufacture as per Section 2(f)(iii) of the C Central Excise Act, 1944. Therefore, the goods were seized and impugned proceedings were initiated. The learned Commissioner held that the activity amount to manufacture therefore the duty demand was confirmed along with interest and equivalent amount of penalty was also imposed. The goods were allowed to be redeemed on payment of redemption fine of Rs.1 crore. Aggrieved by the said order, the appellant is before us.
3. As the matter came up for several times before this Tribunal and this Tribunal was of the view that the stay application has to be heard along with appeal therefore we take up the appeal as well as the stay application together for final disposal.
4. Heard both sides.
5. The learned Counsel for the appellant submits that after import of goods wherever it was found that label/sticker was damaged or missing they carried out the activity of stickering and re-labeling on the said goods as prescribed under the relevant statutes. Therefore, their activity does not amounts to manufacture as per the decision of this Tribunal in the case of LOreal India Pvt. Ltd. vide order No. A/422-430/14/EB/C-II dated 13.06.2014. He further submits that as it is a case of revenue neutrality, as they have paid CVD on the imported goods on MRP basis, If their activity happens to be amounts to manufacture, then they are entitled to take CENVAT Credit of the CVD paid by them. As MRP remain same the liability of the duty shall be qual to the CENVAT Credit of CVD. In these circumstances, the learned Advocate prays that the impugned order is required to be set aside.
5.1 With regard to the issue of revenue neutrality, the learned Advocate relies on the decision in the case of BASF India Ltd. v. CCE 2009 (245) ELT 381 (Tri. Ahmd.) and also on the decision in the case of LOreal India Pvt. Ltd. (supra).
6. On the other hand, the learned A.R. opposes the contentions of the learned Counsel and submits that the main issue in this case is that whether putting MRP stickers in their private warehouse amounts to manufacture or not. Admittedly as per the Section 2(f)(iii) of the Central Excise Act, 1944 the said activity amounts to manufacture. Therefore, the show-cause notice has rightly been issued to the appellant. The learned Commissioner has rightly upheld that the activity undertaken by the appellant is an activity of manufacture. He also submits that the facts of the case of LOreal India Pvt. Ltd. (supra) are distinguishable to the facts of this case but on the issue of revenue neutrality he fairly admitted that the dutydemanded in the show-cause notice and the CVD paid by the appellant on the MRP basis are the same.
7. Considered the submissions made by both sides.
8. We find that in this case, the show-cause notice issued to the appellant on the issue whether the activity of labeling/re-labeling or putting stickers on the imported goods amounts to manufacture or not. In the case of LOreal India Pvt. Ltd. (supra) we find that this Tribunal has observed that as the activity of fixing MRP stickers took place in Customs bonded ware house therefore, the same does not amounts to manufacture but in this case the MRP stickers have been fixed after clearance of the goods from the Customs. Therefore, as per Chapter note and Section 2(f)(iii) of the Central Excise Act, 1944, the activity undertaken by the appellant amounts to manufacture. In these circumstances, we hold that the activity undertaken by the appellant is amounts to manufacture.
8.1 As we held that the activity undertaken by the appellant amounts to manufacture, the appellant is entitled to take CENVAT Credit of CVD paid by them at the time of importation of the goods.
8.2 We also find that the MRP declared before the Customs or before the Central Excise is the same therefore, the duty payable on the said goods equal to the CVD paid by the appellant. Therefore, the situation is of Revenue neutrality as held by this Tribunal in the case of LOreal (supra) and BASF India Ltd. (supra). As the whole exercise in this case is of Revenue neutrality, therefore, following the above cited decisions, we hold that although the activity undertaken by the appellant amounts to manufacture but the duty impact is nil being of Revenue neutrality situation therefore, we set aside the demand confirmed by the adjudicating authority in the impugned order and also set aside the imposition of redemption fine, interest and penalty.
9. In these terms the appeal is allowed. Stay application is also disposed of in the above terms.
(Dictated in open Court) (P.S. Pruthi) Member (Technical) (Ashok Jindal) Member (Judicial) nsk ??
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