2014 (12) TMI 618 - CGOVT - Central Excise

Government grants applicant eligibility for rebate claim, classifying packing as manufacture under Central Excise Act.

The government determined that the processes of packing, repacking, and labeling undertaken by the applicant constitute manufacture under Section ... Export Rebate claim - Rule 18 - Under Notification No. 21/2004-C.E. (N.T.), dated 6-9-2004 - Assessee did not carry out any process of manufacture of the inputs received and exported - Held that:- Original authority has rejected the applicant’s claim by holding that the process of. packing/repacking and labeling, re-labelling of goods meant for export, under taken by the applicant, doesn't amount to manufacture and is, thus not eligible for claim of rebate as per Notification No. 21/2004(N.T.) dated 06.09.2004 Commissioner (Appeals) upheld the impugned Order-in-Original. Terms used is material not input. Moreover, the material is to be used in the manufacture of processing of the goods. The process of processing of the goods may not amount to manufacture in terms of Section 2(f) of the Central Excise Act, 1944. The process of testing/re-packing etc. definitely amounts to processing of the goods. Respondents have used the materials in the processing of export goods and complied with all the conditions/procedures of the Notification No. 21/2004-C.E.N. T.), dated 6-9-04 which was valid during the period of export and there is no dispute about the actual export of the goods Therefore, respondents were eligible for input stage rebate claim subject to fulfilment of condition mentioned - Following decision of IN RE: AV INDUSTRIES [2010 (9) TMI 762 - GOVERNMENT OF INDIA, MINISTRY OF FINANCE] - Decided in favour of assessee. Issues Involved:1. Eligibility for input stage rebate under Notification No. 21/2004-CE (NT) dated 06.09.2004.2. Whether the process of packing/repacking and labeling/re-labeling amounts to manufacture under Section 2(f)(iii) of the Central Excise Act, 1944.3. Applicability of various judicial precedents and CBEC circulars.4. Entitlement to interest on delayed rebate claims under Section 11 AB of the Central Excise Act, 1944.Issue-wise Detailed Analysis:1. Eligibility for Input Stage Rebate:The applicant, M/s. Honda Cars India Limited, filed a declaration for input stage rebate under Notification No. 21/2004-CE (NT) for goods exported on payment of Central Excise duty. The original authority rejected this declaration, holding that the processes undertaken by the applicant did not amount to manufacture, thus disqualifying them from the rebate claim. The Commissioner (Appeals) upheld this decision.2. Whether the Process Amounts to Manufacture:The applicant argued that activities such as packing, repacking, and labeling of goods amount to manufacture under Section 2(f)(iii) of the Central Excise Act, 1944. They cited the expansive definition of manufacture, including processes like packing and labeling, as supported by the judgment in CCE Bombay vs. SD Fine Chemicals. The applicant further argued that these processes render the products marketable to buyers abroad, thus qualifying as manufacture.3. Applicability of Judicial Precedents and CBEC Circulars:The applicant relied on several judicial precedents, including Air Liquide North India Pvt. Ltd. vs. CCE Jaipur and Nestle India Ltd. vs. CCE Chandigarh-II, to support their claim that their processes amount to manufacture. They also referred to CBEC Circular No. 342158/97-0X and Circular No. 489/55/99, which clarify that packing and labeling can amount to manufacture. The applicant argued that these circulars and judicial precedents support their eligibility for the rebate.4. Entitlement to Interest on Delayed Rebate Claims:The applicant sought interest on the delayed rebate claim under Section 11 AB of the Central Excise Act, 1944, arguing that they are entitled to interest from the date immediately after the expiry of three months from the date of receipt of the application until the date of allowing the rebate.Government's Observations and Decision:The government carefully reviewed the case records, the impugned orders, and the submissions made by the applicant. It observed that the processes undertaken by the applicant, such as packing, repacking, and labeling, indeed amount to manufacture as per Section 2(f)(iii) of the Central Excise Act, 1944. The government relied on the judgment in the case of In Re: A.V. Industries, which supports the applicant's claim that such processes amount to manufacture and are eligible for input stage rebate.The government concluded that the applicant is eligible for the rebate claim subject to the fulfillment of conditions stipulated in Para (10) of the Revisionary authority's orders in the case of M/s. A. V. Industries. Consequently, the government set aside the impugned Order-in-Appeal and allowed the revision application, thereby granting the rebate claim to the applicant.Conclusion:The revision application succeeds, and the applicant is entitled to the input stage rebate along with interest on the delayed rebate claim as per the provisions of Section 11 AB of the Central Excise Act, 1944. The government's decision sets aside the previous orders and grants the rebate claim to the applicant.