Customs, Excise and Gold Tribunal - Mumbai
Parle Products Pvt. Ltd. vs Commissioner Of Central Excise on 23 July, 2003
ORDER Gowri Shankar, Member (T)
1. Appeals taken up for disposal with consent of both sides, after waiving deposit.
2. The appellant purchased biscuits that had been manufactured by other persons and sent to it after being packed in cartons. It affixed upon the cartons sticker containing the appellant's logo, the kind of biscuits (e.g. "Marie"), showing net weight and bearing name and address of the consignee. The appellant on its view that the act of affixing a label on the biscuits rendered the goods to have been manufactured in terms of note 3 to Chapter 19 took credit under Rule 57A of the duty paid on the biscuits by the persons who have manufactured them, and utilised such credit towards payment of duty on other goods that it manufactured and cleared for home consumption. No duty was paid on the biscuits that were removed. The two notices issued to the appellant proposed to recover the credit that had been taken, on the ground that the appellant's activity did not amount to manufacture. The Assistant Commissioner confirmed the proposal in the notice and imposed penalty. This order having been confirmed on appeal by the Commissioner (Appeals), the matter is before us.
3. The contention of the counsel for the appellant that this treatment of the goods amounted to manufacture in terms of Rule 12 & 13 is difficult to accept. His reliance upon Clause (1) of the Explanation under Rule 12 and 13 is misplaced. These clauses say that in those rules, manufacture includes the process of blending of any goods or making alterations or any other operation thereon. The term "any other operation thereon" has to be considered ejusdem generis. By doing so, it would not be possible to say that affixing a sticker on the container of the biscuits amounts to manufacture within the meaning of these rules. Even on the assumption that it amounts to manufacture, that meaning would only apply to these two rules. The explanations to Rule 12 & 13 make it clear that the meanings contained in them apply to only those rules. We do not see how this entitles the appellant to credit in terms of the rules relating to modvat.
4. The appellant next relies upon the provisions of trade notice No. 43/2001 dated 7.6.2001 in order to say that the department having accepted that process amounts to manufacture cannot now take as a fresh stand. The trade notice informs the trade that affixing a sticker on imported medicaments which indicate the name of the importer, name of the marketing company, ingredients of the product, statutory warning and maximum retail price specified under the Drugs and Cosmetics Act, 1940 would amount to manufacture in terms of note 5 to Chapter 30. This trade notice clearly will not apply to the facts before us. The goods in question are not medicaments classifiable in Chapter 30, but the biscuits classifiable in Chapter 19. the sticker that the appellant affixed contained only the name of the product, and of the net weight of the consignee's name and address is very different from the sticker referred to in the trade notice.
5. It is therefore clear that the process undertaken by the appellant did not amount to manufacture and it was not entitled to take modvat credit. Counsel for the appellant however contends that even so penalty was not imposable. He points out that if the goods have been exported without being subjected to any process, rebate of the duty paid on the goods would be available in terms of Rule 12. He further contends that the department had been kept informed of the activities and these establish its bona fide. We see the justice of both these points and accordingly set aside the penalty imposed on the appellant.
6. The appeal is allowed to that extent.