Customs, Excise and Gold Tribunal - Calcutta
Abdos Trading Co. Pvt. Ltd. vs Commissioner Of C. Ex. on 20 December, 2006
ORDER T.K. Jayaraman, Member (T)
1. In terms of the impugned order the appellant is required to pre-deposit a sum of Rs. 58,22,618/- (Rupees Fifty-eight lakhs twenty-two thousand and six hundred eighteen only) along with interest. Further equal penalty has been imposed under Section 11AC. A penalty of Rs. 5,00,000/- (Rupees Five lakhs only) is required to be deposited by Shri Ram Gopal Agarwal, Appellant No. 2. The appellant received standard packets of Soda Ash from M/s. Tata Chemicals Limited, Gujarat. They repacked the standard packets of 75 Kgs. and 50 Kgs. into smaller packets of 1 Kg. and 500 gms. It is the contention of the Revenue that this process of repacking into smaller packets amounts to manufacture in terms of Note 10 of Chapter 28 of the Central Excise Tariff Act, 1985. Proceedings were initiated and the adjudicating authority passed the impugned order for the periods 1997-98,1998-99 and 1999-2000. The ld-. Advocate took us through Note 10 of Chapter 28 and also various case laws to urge that a process of repacking from standard packets to smaller packets would not amount to manufacture. In Amritlal Chemaux Ltd. v. CCE, Mumbai-IV the Tribunal held that repacking from 50 Kgs. 30 Kgs. and 25 Kgs. drums to 10 Kgs. drums, 1 Kg. and half Kg. polythene packs would not amount to manufacture under Note level to Chapter 29 or co-error into 3 to Chapter 32. He said that there is a distinction between bulk pack and standard pack. In the present case, there is no repacking from bulk pack to retail pack. Therefore, Note 10 relied on by the Revenue is not applicable. As a result, the process does not amount to manufacture. He emphasized that when the appellants received Soda Ash in 75 Kgs. and 50 Kgs. they are already in marketable condition. The appellant sells 95 per cent of the products and as such only a small percentage of the goods received M/s. Tata Chemical Ltd. are repacked into smaller packets of 1 Kg. and 1 /2 Kg. In view of the various case laws on the subject he said that this process would not amount to manufacture. He relied on following case laws:
(1) Johnson & Johnson Ltd. and Ors. v. CCE, Mumbai-IV 2003 RLT 1023 (CESTAT-Mum.). (2) CCE, Mumbai v. John & Johnson Ltd. 2005 (71) RLT 5 (S.C.). (3) Lupin Laboratories Ltd. v. CC and CCE, Aurangabad .
(4) Buns and Cones Pvt. Ltd. and Ors. v. CCE, Delhi-II 2005 (124) ECR 371 (Tri.-Delhi).
2. In the Buns case it has been clearly held that enhancement of marketability by repacking is not covered by the deemed definition of manufacture given in Note 7 to Chapter 21. Note 7 to Chapter 21 is similar to Note 10 to Chapter 28. On a careful consideration of the entire issue we find that the appellant already receives Soda Ash in packets of 75 Kgs. and 25 Kgs. in marketable condition. The very small percentage of the goods received are repacked into smaller packets. This issue is squarely covered by the decision cited (supra) and particularly the case of Buns Pvt. Ltd. We agree that the contention of the ld. Advocate that what is contemplated in Note 10 to Chapter 28 is only repacking from bulk pack to smaller packets and not from standard packets retail packets. In the circumstances, the process undertaken by the appellant does not amount to manufacture. Prima facie the appellants have a strong case. Hence we order waiver of pre-deposit of the entire amount of duty, penalty and interest till the disposal of the appeals.
(Dictated and pronounced in the open Court)