2015 (4) TMI 282 - AT - Central Excise

Appellant's Manufacturing Activities Liable for Duty Under Central Excise Act

The Tribunal upheld that the appellant's activities constituted 'manufacture' under section 2(f)(iii) of the Central Excise Act, 1944, making the goods ... Waiver of pre deposit - Marketibility of goods - sale of spare part of automobile procured locally and imported after packing or unpacking - MRP based levy u/s 4A - Held that:- goods shall be brought under the purview of section 2(f)(iii) of Central Excise Act, 1944. - Appellant failed to show the percentage of sale without labeling and repacking and otherwise. Therefore, prima facie it enables us to construe that the entire clearing was made packing, repacking and labeling the goods for marketability thereof. Therefore, there is nothing to doubt the finding of Adjudicating Authority at this interim stage but to endorse to his view as well as contention of Revenue. We fail to understand why cross-examination is necessary in the present case when the appellant did not justify before the authority below as to necessity thereof. Since cross-examination is not a right to cause prejudice to the other side following dilatory tactics, that is deniable. There was nothing incredibility in the depositions brought out by the appellant. Statements recorded under section 14 of Central Excise Act, 1944 is in the course of Judicial proceeding. That cannot be brushed aside. Therefore, we are prima facie of the opinion that Revenue has a prima facie case for directing predeposit due to shifting of the unit - Decided against assessee. Issues Involved:1. Whether the activity carried out by the appellant constitutes 'manufacture' under section 2(f)(iii) of the Central Excise Act, 1944.2. Whether the appellant is liable to duty for the goods cleared by packing and labeling.3. Whether the appellant was denied a fair opportunity for cross-examination.4. Whether the appellant's plea for financial hardship should be considered for interim relief.Detailed Analysis:1. Whether the activity carried out by the appellant constitutes 'manufacture' under section 2(f)(iii) of the Central Excise Act, 1944:The appellant argued that the activities performed, which included packing and labeling of goods, did not amount to 'manufacture' as defined under section 2(f)(iii) of the Central Excise Act, 1944. The appellant relied on previous judicial decisions, such as Lakme Lever Vs. CCE and CCE Vs. Mysore Ammonia Pvt. Ltd., to support their claim that mere packing does not make goods marketable and hence does not constitute manufacturing. However, the adjudicating authority found that the goods were branded and labeled as 'VECTRA,' which made them marketable and thus liable to duty. The Tribunal endorsed this view, stating that the legislative intent behind section 2(f)(iii) was to include marketability of packed goods within the ambit of manufacturing.2. Whether the appellant is liable to duty for the goods cleared by packing and labeling:The adjudicating authority concluded that the goods cleared by the appellant were subject to the provisions of the Standard of Weights and Measures (Packaged Commodities) Act, making them liable to duty under section 4A of the Central Excise Act, 1944. The authority noted that the appellant failed to explain the necessity of labeling and packing, thus affirming that these activities made the goods marketable. The Tribunal agreed with this assessment, noting that the appellant did not provide sufficient evidence to show that the goods were sold without packing and labeling.3. Whether the appellant was denied a fair opportunity for cross-examination:The appellant contended that they were not given an opportunity to cross-examine the witnesses whose depositions were used against them. However, the revenue argued that the appellant did not make a specific prayer for cross-examination during the denovo adjudication. The adjudicating authority found no necessity for cross-examination, as the evidence presented was credible and recorded under section 14 of the Central Excise Act, 1944, which is considered judicial. The Tribunal upheld this view, stating that cross-examination is not a right and is not granted mechanically, especially when the appellant did not justify its necessity.4. Whether the appellant's plea for financial hardship should be considered for interim relief:The appellant pleaded financial hardship and requested a reasonable consideration for interim relief. The Tribunal examined the facts and circumstances and concluded that directing a reasonable predeposit would not cause undue hardship to the appellant. The Tribunal referred to the Supreme Court's judgment in Assistant Collector Vs. Dunlop (India) Ltd., emphasizing that interim relief should not jeopardize public revenue. Consequently, the Tribunal directed the appellant to deposit Rs. 2,00,00,000 in two equal installments, considering the interest of revenue and the need for compliance.Conclusion:The Tribunal upheld the adjudicating authority's findings that the appellant's activities constituted manufacture under section 2(f)(iii) of the Central Excise Act, 1944, making the goods liable to duty. The plea for cross-examination was denied due to lack of justification, and the appellant's request for financial hardship was considered but did not exempt them from making a predeposit. The Tribunal directed the appellant to deposit Rs. 2,00,00,000 in two installments to protect the revenue's interest.