Tribunal: Labeling Imported Supplements Not Manufacturing; No Excise Duty. The Tribunal ruled in favor of the appellant, determining that affixing an additional label on imported dietary supplements did not amount to ...
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Tribunal: Labeling Imported Supplements Not Manufacturing; No Excise Duty.
The Tribunal ruled in favor of the appellant, determining that affixing an additional label on imported dietary supplements did not amount to 'manufacture' attracting Central Excise Duty. The Tribunal held that the labeling did not make the product marketable as it was already marketable at import, and therefore, the second part of the note to Chapter 21 of the Central Excise Tariff did not apply. Consequently, the appeal was allowed, and the impugned order was set aside in favor of the appellant with consequential relief provided.
Issues: Whether affixing an additional label on imported dietary supplements amounts to 'manufacture' attracting Central Excise Duty.
Analysis: The appellant imported dietary supplements in retail packets with labels. After customs clearance, they affixed another label and sold the goods. A show cause notice alleged that affixing the additional label constituted 'manufacture' attracting Central Excise Duty. The notice relied on the note to Chapter 21 of the Central Excise Tariff and Section 2(f) of the Central Excise Act.
The appellant argued that affixing the label did not amount to 'manufacture' as per the note or definition. The Commissioner held that the labeling enhanced marketability, falling under the second part of the note. The appellant contended that the second part was not the basis of the notice and that affixing the label did not relate to making the product marketable, as it was already marketable at import.
The Tribunal noted that the note had two parts: labelling/re-labelling and adoption of any other treatment. The second part did not apply to the appellant's case, as the product was already marketable at import. The Tribunal emphasized that 'making the product marketable' means making it ready for marketing, not for every stage of sale. Therefore, affixing the label did not attract excise duty, and the appeal was allowed.
In conclusion, the Tribunal set aside the impugned order, ruling in favor of the appellant and providing consequential relief.
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