Custom, Excise & Service Tax Tribunal
M/S Godrej Hershey Limited vs Cce &St, Bhopal on 24 August, 2016
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL West Block No.2, R. K. Puram, New Delhi, Court No. 1 Date of hearing: 19.08.2016 Date of decision: 24.08.2016 Excise Appeal No. 1075 of 2009 (Arising out of order-in-original No. 02/COMMR/CEX/2009 dated 28.01.2009 passed by the Commissioner of Customs, Central Excise & Service Tax, Bhopal). M/s Godrej Hershey Limited Appellant Sh. Shameem Ahmed, Advocate for the appellant Vs. CCE &ST, Bhopal Respondent
Ms. Neha Garg, DR for the Respondent AND Excise Appeal No. 27 of 2010 (Arising out of order-in-original No. 605/BPL/2009 dated 12.10.2009 passed by the Commissioner, Central Excise, Bhopal).
CCE, Bhopal Appellant
Ms. Neha Garg, DR for the appellant -Revenue
Vs.
M/s Godrej Harshey Limited Respondent
Sh. Shameem Ahmed, Advocate, DR for the Respondent -assessee
Coram:
Honble Mr. Justice (Dr.) Satish Chandra, President
Honble Mr. B. Ravichandran, Member (Technical)
Final Order Nos. 53185 53186 / 2016
Per: B. Ravichandran:
There are two appeals, one by the appellant assessee and another by Revenue. Since the issue involved is same in both the appeals they are taken up together for disposal. The appellant assessees appeal is directed against order dated 28.01.2009 of Commissioner of Central Excise, Bhopal. The brief facts of the case are that the appellant-assessee are engaged in the manufacture of food preparation liable to Central Excise duty. Upon scrutiny of records of the appellant-assessee the Revenue entertained a view that they are involved in the manufacture of PET bottles from pre-forms purchased as inputs and cleared the same without payment of duty for filling exempted fruit beverage. Accordingly, proceedings were initiated against the appellant to demand and recover of Central Excise duty and to impose penalties. After a due process, the original authority confirmed a demand of Rs.61,22,732/- for the period January, 2004 to July, 2007.
2. We have heard the ld. Counsel for the appellant-assessee and ld. DR for the Revenue and perused appeal records. The admitted facts of the case are that the appellant-assessee were using the services of job worker for manufacture of fruit pulp in PET bottles. The appellant-assessee procures pre-forms required to manufacture of PET bottles and supply the same to the job worker. The job worker converts the pre-forms into PET bottles and there upon fills the same with fruit pulp which is an exempted product. The dispute is tax liability of the appellant assessee on PET bottles that emerges at the job workers unit during the course of manufacture and clearance of fruit pulp based drink packed in PET bottle. Regarding the first question as to whether the appellant-assessee is the manufacturer of such PET bottle, we find that the original authority erred in applying the definition in terms of Section 2(f) of Central Excise Act, 1944. First of all, the definition discussed by the original authority is not available during the impugned period. Irrespective of this fact we note that the appellant-assessee cannot be considered as a manufacturer of PET bottle for the simple reason that they have not undertaken any such process. In other words, if they supply pre-form to the job worker to be converted into PET bottles and for the further use in packing the fruit pulp, the same cannot make the appellant assessee as a manufacturer. The admitted fact of the case is the job worker is an independent legal entity and irrespective of ownership of pre-form or the PET bottle the appellant-assessee having been not involved in any process of manufacture cannot be held as a manufacturer for excise duty purposes. We refer to the observation of Honble Supreme Court in Ujagar Prints, etc.etc. vs. Union of India and Others 1988 (38) ELT 535 (S.C.). The Honble Supreme Court observed that the question whether the produces or the manufacturer is or is not the owner of the goods is not determinative of the tax liability. In CCE, Goa vs. Cosme Farma Laboratories 2015 (318) ELT 545 (SC) the Honble Supreme Court held that when the manufacturing activity was done only by the job workers in their premises and with the help of their labour force and machinery, following the quality control or specification of the principal manufacturer does not make the supplier of raw material as a manufacturer. Similar view was held by the Tribunal in Food & Health Care Specialities vs. CCE, Delhi-IV 2015 (328) ELT 92 (Tri. Del.). The Honble Madras High Court in Ashok Leyland Limited vs. CCE - 1993 (68) ELT 65 (Mad.) held that if the job worker is an independent concern and there is nothing in the arrangement between the two persons to show that the transaction is not genuine, the liability of the manufacturer will rest with the person who is undertaking the activity. We note that there are various other decisions, following the same ratio, by the Tribunal. We find that on this ground alone the demand against the appellant-assessee will fail.
3. Further, we also note that the alternate plea of the appellant regarding eligibility of exemption for such PET bottles in terms of Notification No. 10/96-CE dated 23.07.1996 is also on the sound footing. The original authority rejected the claim for exemption on the ground that the said PET bottles are not consumed in the manufacture of specified goods (fruit pulp drink). We find that the fruit pulp cannot be marketed without being packed in the bottle. The packed fruit pulp is the product subjected to excise levy. In the manufacture of such packed fruit pulp, PET bottle is apparently consumed. We may refer to the Tribunal decision in Mihijam Vanaspati Limited vs. CCE, Jamshedpur 2001 (129) ELT 631 (Tri. Kolkata) and also Rama Phosphate Ltd. vs. CCE, Indore 2003 (152) E:T 315 (Tri. Del.). The Tribunal while interpreting the scope of the said notification held that when the tin containers manufactured by the appellant are captively used for packing vanaspati within the factory, the exemption is available to such tin container. The same ratio is applicable to the present case also. As such, we find the appellant-assessee will succeed on both the grounds.
4. In view of the above analyses and findings, we allow the appeal filed by the appellant-assessee.
5. We note that the appeal by the Revenue is against order dated 12.10.2009 of Commissioner (Appeals), Bhopal who though held the appellant assessee as the manufacturer of PET bottles allowed the exemption for captive consumption under Notification No. 10/96-CE. The Revenue is aggrieved against allowing such exemption. In view of our above finding, we find no merit in the appeal by the Revenue. Accordingly, the same is dismissed.
6. During the course of hearing, ld. Counsel for the appellant-assessee submitted that they have filed a miscellaneous application for change in the cause title in view of the fact that the appellant-assessee changed their name to Hershey India Private Limited. The certificate of incorporation issued by the competent authority was also enclosed alongwith the application. Accordingly, we allow the change in the cause title as prayed for.
(Pronounced on 24.08.2016).
(Justice (Dr.) Satish Chandra) President (B. Ravichandran) Member (Technical) Pant