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of <h1>Tribunal overturns duty demand on labelling; process not manufacturing under CETA.</h1> <h3>NILGIRI HERBALS PVT. LTD. Versus COMMR. OF C. EX., SURAT</h3> The Tribunal set aside the Commissioner of Central Excise's order imposing duty demand, penalties, and confiscation in the case involving ... Manufacture Issues:Interpretation of Note 6 to Chapter 34 of the Schedule to CETA 1985 regarding the process of labelling/re-labelling as manufacturing.Imposition of duty demand, penalty, and confiscation of goods by the Commissioner of Central Excise.Applicability of Tribunal Order No. CI/4093-4094/WZB/2000 in setting aside duty demand and penalty.Decision on whether labelling/re-labelling of containers amounts to manufacture.Analysis:The case involved a dispute regarding the process of labelling/re-labelling of containers as manufacturing under Note 6 to Chapter 34 of the Schedule to CETA 1985. M/s. Nilgiri Herbals Pvt. Ltd. entered into an agreement to use the brand name 'COLIN' for marketing glass and household cleaners. The bottles received from manufacturers were re-labelled with the 'COLIN' brand name and sold to customers. A Show Cause Notice was issued demanding duty and proposing confiscation of goods, which was adjudicated by the Commissioner of Central Excise imposing penalties and confiscation.The Commissioner held that the labelling/re-labelling process amounts to manufacturing under Note 6. However, M/s. Nilgiri Herbals Pvt. Ltd. sought a decision based on a Tribunal Order in their favor, setting aside duty demand and penalty in a similar case. The Tribunal found that prior to an amendment in 1997, labelling/re-labelling did not constitute manufacturing as per the generic expression in Note 6. Therefore, the Tribunal set aside the Commissioner's order based on the precedent and allowed the appeals.The Tribunal's decision was based on the interpretation of Note 6 and the applicability of the precedent in a similar case. The Tribunal concluded that the labelling/re-labelling process undertaken by M/s. Nilgiri Herbals Pvt. Ltd. did not fall within the scope of manufacturing as defined in Note 6. As a result, the impugned order imposing duty demand, penalties, and confiscation was set aside, and the appeals were allowed. The misc. application for early hearing of the appeals was dismissed as infructuous.
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