2015 (12) TMI 1348 - AT - Central Excise

Tribunal Upholds Decision on Edible Oil Repacking Not Constituting Manufacturing

The Tribunal upheld the first appellate authority's decision in favor of the respondent, dismissing the Revenue's appeal. It was determined that the ... Manufacture - repacked of edible oil from tanker to small containers - manufacture of edible oil which are branded as they repacked in the different quantity pack of edible oil from tanker to small containers - Held that:- the activity of packing refined edible oil received in tankers into small containers cannot be treated as manufacturing activity in terms of Note 4 of Chapter 15 of Central Excise Tariff Act, 1985 The first appellate authority, in our considered view, correctly followed the law as has been decided by the Tribunal in the case of Amonia Supply Company- [2001 (5) TMI 81 - CEGAT, COURT NO. III, NEW DELHI] to hold in favour of the respondent. - Respondent was receiving the edible oil in tankers. It is not bulk pack as the finding, which has not been controverted by the Revenue. - impugned order before us is correct and legal and does not suffer from any infirmity. - Decided against Revenue. Issues:Revenue's appeal against setting aside of duty demand, interest, and penalties by the first appellate authority due to repacking activity of edible oil.Analysis:1. The Revenue filed appeals against the Order-in-Appeal setting aside duty demand, interest, and penalties imposed on the respondent for repacking edible oil. The Revenue contended that repacking from bulk to retail packs amounted to manufacture as per Chapter 15, Note 4 of the Central Excise Tariff Act, 1985.2. The learned AR argued that the respondent's repacking activity of edible oil into retail containers with branding constituted manufacture as per Chapter 15, Note 4. However, the respondent's counsel referred to Chapter Note 4 and argued that labeling, relabeling, and repacking should be considered together for determining manufacturing activity, citing relevant case laws and settled legal principles.3. The Tribunal analyzed the submissions and records, noting that the first appellate authority correctly applied the law in favor of the respondent based on precedents like the Ammonia Supply Co. case. The Tribunal emphasized that the product received in tankers could not be considered bulk packs, supporting the respondent's position.4. The Tribunal highlighted the significance of Chapter Note 4 of Chapter 15, which deems repacking/relabeling as manufacture. Referring to the Apex Court's judgment in the Amritlal Chemaux case, the Tribunal reiterated the legal principles and extended meaning of 'manufacture' under the relevant Chapter Notes.5. By quoting the Apex Court's detailed judgment in the Amritlal Chemaux case, the Tribunal clarified the conditions for an activity to be classified as manufacture under Chapter Notes 11 of Chapter 29 and Chapter 3 of Chapter 32. The Tribunal dismissed the Revenue's appeal, affirming that the repacking activity of the respondent did not meet the criteria for manufacture under the applicable Chapter Notes.6. Ultimately, the Tribunal upheld the impugned order as correct and legally sound, concluding that the repacking of edible oil by the respondent did not amount to manufacture under the relevant provisions. The appeals filed by the Revenue were rejected based on the settled legal principles and precedents cited during the proceedings.