Tribunal waives duty & penalty for imported goods with chassis stickers. Affixing stickers post-clearance not manufacturing.

The Tribunal found in favor of the applicant, waiving the pre-deposit of duty and penalty for imported goods with stickers bearing chassis numbers and warranty. The Tribunal concluded that affixing stickers post-clearance did not constitute manufacturing under the Central Excise Act. The applicants' actions of affixing additional stickers were deemed necessary for marketability, falling within the definition of manufacturing. As a result, the pre-deposit of duty and penalty were waived for the appeal hearing, and stay petitions were granted.

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Issues:
Waiver of pre-deposit of duty and penalty for imported goods with stickers bearing chassis number and warranty.

Analysis:
The applicant sought waiver of pre-deposit of duty amounting to Rs. 59,22,182/- and an equal penalty, including a penalty of Rs. 2 lakh on the Director, concerning the import of VCD/DVD/Multi players into India. The goods, upon import, already had markings as required under the EXIM Policy and Standards of Weights and Measures Act. Subsequently, the applicants affixed stickers bearing the Chassis No. and warranty seal. The demand was contested on the grounds that affixing original stickers amounted to manufacturing under Section 2(f)(iii) of the Central Excise Act.

The applicant argued that the goods imported already bore the brand name of Beltek and all necessary information, and they merely added stickers with chassis numbers and warranty details. They contended that this action did not constitute manufacturing. The revenue, however, claimed that affixing stickers post-clearance amounted to manufacturing. The Tribunal observed that the definition of manufacture includes processes like packing, re-packing, labeling, or re-labeling goods to render them marketable to consumers.

Considering the facts, the Tribunal found that the applicants conducted sample testing and affixed warranty stickers and chassis numbers. Prima facie, in light of Section 2(f), the Tribunal concluded that the applicants had a strong case. Consequently, the pre-deposit of duty and penalty was waived for the appeal hearing, and stay petitions were allowed. The decision was pronounced and dictated in open court by the Vice-President.

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