Customs, Excise and Gold Tribunal - Tamil Nadu
Commissioner Of Central Excise vs Zeneca Ici Agro Chemicals Ltd. on 28 February, 2008
Equivalent citations: 2008(120)ECC197, 2008(156)ECR197(TRI.-CHENNAI)
ORDER P.G. Chacko, Member (J)
1. The respondents were engaged in the manufacture of Pesticides (SH 3808.10 of the First Schedule to the Central Excise Tariff Act) during the material period. During the period December, 1998 to January, 1999, they had cleared such products under Rule 173H of the erstwhile Central Excise Rules, 1944 without payment of duty. These clearances were effected after repacking and relabelling, for which purpose the defective finished goods were returned by the buyer. Upon receipt of the goods so returned by the buyer, the assessee filed D-3 declaration with the department and proceeded to undertake the activities of repacking and relabelling on the said goods, followed by its clearance without payment of duty, under Rule 173H. The original authority demanded duty on the pesticides so cleared second time by the assessee. The basis of this demand was that the repacking and relabelling amounted to 'manufacture' in terms of Note 2 to Chapter 38 of the Tariff Schedule and, therefore, the resulting product would be dutiable. This view taken by the original authority was rejected by the Commissioner (Appeals) with the result that the demand of duty was set aside. Hence the present appeal of the Revenue.
2. After hearing learned SDR for the Revenue and learned Counsel for the assessee, we have found no merit in this appeal. It is too late in the day for the Revenue to say that the duty-paid goods returned by the buyer for reprocessing, remaking, repairs etc., to the manufacturer under Rule 173H should be held to have undergone a process of manufacture and hence should suffer duty once again when cleared under Rule 173H. This view has been rejected by this Tribunal in ever so many cases including the one cited by learned Counsel viz. Ashok Manufacturing Co. (P) Ltd. v. Commissioner of Central Excise, Delhi-I . In the cited case, certain machine which was manufactured and cleared on payment of duty to the buyer, but returned to the manufacturer for remaking under Rule 173H. After the requisite process, the machine was cleared, without payment of duty, to a third party. The department demanded duty on this clearance on the ground that the re-made machine was cleared to a third party. It was not the case of the Revenue that, if the re-made machine had been cleared to the same buyer, duty not ought to have been paid on the clearance. In the present case, the repacked/relabeled pesticides were cleared to the same buyer under Rule 173H.
3. In the result, the impugned order is sustained and this appeal is dismissed.
(Dictated and pronounced in open court)