Custom, Excise & Service Tax Tribunal
Commissioner Of Central Excise, ... vs M/S Anwar Oils, Kolhapur on 2 November, 2015
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO. I Appeal No. E/2867 & 2868/05 (Arising out of Order-in-Appeal No. P-II/BKS/263-264/2005 dated 31.5.2005 passed by the Commissioner of Central Excise (Appeals), Pune-II). For approval and signature: Honble Shri M.V. Ravindran, Member (Judicial) Honble Shri C.J. Mathew, 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 : Yes 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? ====================================================== Commissioner of Central Excise, Pune-II Appellant Vs. M/s Anwar Oils, Kolhapur Respondent Appearance: Shri Sanjay Hasija, Supdt. (AR) for Appellant Shri V.B. Gaikwad, Advocate for Respondent CORAM: SHRI M.V. RAVINDRAN, MEMBER (JUDICIAL) SHRI C.J. MATHEW, MEMBER (TECHNICAL) Date of Hearing: 02.11.2015 Date of Decision: 02.11.2015 ORDER NO. Per: M.V. Ravindran
These two appeals are filed by the Revenue against Order-in-Appeal No. P-II/BKS/263-264/2005 dated 31.5.2005 passed by the Commissioner of Central Excise (Appeals), Pune-II, aggrieved by the fact that the first appellate authority has set aside the Order in Original by which the adjudicating authority has confirmed the demand of duty along with interest and also imposed penalties holding that the respondent is engaged in the manufacture of edible oil which are branded as they repacked in the different quantity pack of edible oil from tanker to small containers.
2. The learned AR would submit that there is no dispute as to the facts that the respondent undertook repacking activity of various types of edible oil into retails containers with brand name and has repacked the same from the tankers. He would draw our attention to Note 4 of Chapter 15, to submit that the said note created deemed fiction of manufacturing with labeling or relabeling of containers and repacking from bulk packs to retail packs would amount to manufacture. He would submit that the respondent has adopted the treatment of rendering the product marketable by repacking from tanker to retail packs. He would also submit that the first appellate authority has incorrectly relied upon the judgment of Commissioner of Central Excise, New Delhi Vs. Ammonia Supply Co. - 2011 (6) TMI 482-CESTAT-MUM.
3. The learned Counsel appearing on behalf of the respondent would draw our attention to the same Chapter Note and submit that the labelling or relabeling of container is to be done and repacking from bulk pack to retail packs is to be considered together for holding the activity of manufacture. He would submit that the issue is no more res integra as the Apex Court in the case of Amritlal Chemaux Ltd. 2015 (321) ELT 5 (SC) have settled the law. He would draw our attention to the said judgment and also submit that this Bench in the case of JPB Chemical Industries Pvt. Ltd. & Hitesh J Gandhi Vs. Commissioner of Central Excise 2015 (10) TMI-834-CESTAT-MUM on a similar issue held in favour of the assessee. He produced a copy of the said judgment.
4. We have considered the submissions made at length by both sides and perused the records.
5. The facts are undisputed that the appellant is engaged in the activity of repacking of refined edible oil in retail packs from tankers and labeling with brand name was carried out and that they had received refined edible oil in tankers cleared under the delivery challan which was produced before the first appellate authority. The first appellate authority, in our considered view, correctly followed the law as has been decided by the Tribunal in the case of Amonia Supply Company- 2001 (131) ELT 626 to hold in favour of the respondent. The findings of the first appellate authority are as under: -
It is seen that the adjudicating authority did not follow the ratio laid down in the Tribunals decision in the case of Ammonia Supply C. Vs. Commissioner of Central Excise, New Delhi 2001 (131) ELT 626 by distinguishing the case that the product involved in that case is liquid ammonia, which is a product of industrial application or consumption and not of mass consumption like edible oils. In this regard, it is observed that even though the product involved in this case is different still the case is relevant and the ratio laid down in the said decision is applicable to the present case. Therefore, the tankers cannot be treated as bulk packs and hence packing of the product received in tankers into smaller packs cannot be held as the activity of repacking from bulk packs to retail packs and hence the activity does not amount to manufacture. Further, it is observed that there is no difference in the wording of Chapter Note 4 of Chapter 15. Chapter Note 10 of Chapter 28 and Chapter Note 11 of Chapter 29 and the Tribunal applying the ratio of judgment in the case of Ammonia Supply Co. has decided the following cases in the parties favour (i) Ammonia Marketing Co. Vs. Commissioner of Central Excise Bangalore 2001 (133) ELT 709, (ii) Ram Kishore Chemicals Co. Pvt. Ltd. Vs. Commissioner of Central Excise, New Delhi 2002 (145) ELT 106, (iii) Hotz Ind. Ltd. Vs. Commissioner of Central Excise, Noida 2005 (66) RLT 690. Therefore, in the present case, the activity of packing refined edible oil received in tankers into small containers cannot be treated as manufacturing activity in terms of Note 4 of Chapter 15 of Central Excise Tariff Act, 1985, 1985. Therefore, there is no merit in the stand of the Department. In view of the above, the demand, interest and penalties are not sustainable. It can be seen from the above reproduced findings that the respondent was receiving the edible oil in tankers. It is not bulk pack as the finding, which has not been controverted by the Revenue.
6. We find that the Chapter Note 4 of Chapter 15 in the same words as Chapter Note 11 of Chapter 29 made fiction of repacking/re-labeling as to be deemed manufacture. The said Chapter Note 11 of Chapter 29, was being considered by the Apex Court in the case of Amritlal Chemaux (supra). Respectfully, we reproduce the entire judgment: -
There are three products involved in the present appeal and the question is as to whether the process undertaken by the respondent-assessee in these products amounted to manufacture or not. The products are various dyes & dye bases, napthols & fast bases, and chrome pigments. They fall in Chapter 29 and Chapter 32 of the Central Excise Tariff Act, 1985 (hereinafter referred to as Act) respectively. It is not in dispute that the assessee is not the manufacturer of these products. It buys the same from a manufacturer in bulk quantities in bulk packing. Thereafter, some process is undertaken thereupon, as noted hereinafter and that has given rise to the dispute as to whether such a process amounts to manufacture or not. The process is of repacking and/or labelling. It is thus, an admitted case that the assessee is not a manufacturer in traditional sense. However, by virtue of Chapter Note 11 of Chapter 29 and Chapter Note 3 of Chapter 32 of the Act, which gives extended meaning to manufacture by creating a fiction, the appellant wants to rope in the respondent-assessee under the aforesaid Chapter Notes. The two chapter notes, viz., Chapter Note 11 of Chapter 29 and Chapter Note 3 of Chapter 32 are identically worded and read as under :-
Chapter Note 11 of Chapter 29 :
In relation to products of this chapter, labelling or re-labelling of containers and re-packing from bulk to retail packs or the adoption of any other treatment to render the product marketable to the consumer, shall amount to manufacture. Chapter Note 3 of Chapter 32 :
In relation to products of heading No. 32-06, labelling or re-labelling of containers and re-packing 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.
2.?It was the endeavour of Mr. K. Radhakrishnan, learned senior counsel appearing for the appellant, to argue that even if one of the two processes, viz., labelling or relabelling of containers or for that matter, repacking from bulk to retail packs is undertaken, the same should be treated as manufacture. To put it otherwise, he wanted us to read the word and not conjunctively but disjunctively. We are not impressed with this argument of Mr. Radhakrishnan. It is clear from the plain language of the aforesaid Chapter Notes which use both the expression or as well as and at different places. Thus, by using the two expressions, the intention of the legislature is manifest that insofar as the process of label or relabelling of containers is concerned, it would amount to manufacture only if the other condition, viz., repacking from bulk to retail pack is also satisfied. The aforesaid view gains credence from other fact, i.e., where the second process is treated as manufacture, viz., adoption of any other treatment to render the product marketable to the consumer, the expression any other treatment and that too, with intention to render it marketable clearly shows that insofar first part is concerned, both the conditions have to be satisfied.
3.?Applying the aforesaid principle to the facts of this case, in the first instance, we find that though the show cause notice covered all the three products, viz., dyes & dye bases, napthols & fast bases, as well as chrome pigments, the final order which was passed by the adjudicating authority, did not levy any excise duty on dyes and dye bases. Thus, we are concerned with the remaining two products, viz., napthols & fast bases and chrome pigments.
4.?Insofar as the napthols & fast bases is concerned, even from the order of the Commissioner, it becomes clear that though there was repacking and even relabeling, the repacking of bulk was not into retail packing as the goods after repacking were supplied to industrial consumers on wholesale basis. It is specifically stated so by the assessee which fact is not denied by the Commissioner. Therefore, both the conditions mentioned in the Chapter Notes are not satisfied.
5.?Insofar as the chrome pigments are concerned, the assessee only obliterated the name which was appearing on containers and the name of the assessee along with the logo is stenciled on such container that may amount to relabelling. However, the process of repacking was not undertaken at all by the assessee. Thus, here also both the eligibility conditions which are to be fulfilled have not been satisfied.
6. We, thus, do not find any merit in this appeal which is accordingly dismissed. It can be seen from the above reproduced judgment that the law has been now settled by the Apex Court which is in favour of the respondent herein.
7. In view of the foregoing, we hold that the impugned order before us is correct and legal and does not suffer from any infirmity.
8. The appeals are rejected.
(Dictated and pronounced in Court) (C.J. Mathew) (M.V. Ravindran) Member (Technical) Member (Judicial) Sinha 5 Appeal No. E/2867 & 2868/05