CESTAT ruling: Removing MRP stickers without replacement not manufacturing under Central Excise Act

The Appellate Tribunal CESTAT NEW DELHI, in a judgment by Hon'ble Mrs. Archana Wadhwa, Member (Judicial), clarified that the removal of MRP stickers without affixing new ones does not amount to manufacture under Section 2(f) of the Central Excise Act, 1944. The Tribunal upheld the Commissioner (Appeals)' findings that the mere removal of MRP stickers did not alter the marketability of goods, thus not fulfilling the criteria for manufacturing. Consequently, the Revenue's appeals were rejected, and no duty of excise was confirmed against the respondents.

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Issues:
- Interpretation of Section 2(f) of Central Excise Act, 1944 regarding deemed manufacture.
- Whether removal of MRP sticker without affixing a new one amounts to manufacture.
- Confiscation of goods and imposition of penalties based on MRP sticker removal.

Analysis:

1. Interpretation of Section 2(f) of Central Excise Act, 1944 regarding deemed manufacture:
The judgment involves a crucial interpretation of Section 2(f) of the Central Excise Act, 1944, which provides a deeming provision for manufacture. The provision includes the declaration or alteration of retail sale price to make products marketable to consumers. The case centered on whether the actions of the respondents in removing MRP stickers constituted manufacture under this section.

2. Removal of MRP sticker without affixing a new one - Manufacturing or not:
The primary issue revolved around whether the removal of MRP stickers by the respondents, without affixing new ones, amounted to manufacture as per the Central Excise Act. The Revenue contended that the removal of MRP stickers rendered the goods marketable and thus constituted manufacture. However, the Commissioner (Appeals) held that without affixing new MRPs, the mere removal did not alter the marketability of the goods, hence did not amount to manufacture.

3. Confiscation of goods and penalties based on MRP sticker removal:
The judgment also addressed the consequences of the alleged manufacturing activity. Despite the original adjudicating authority confiscating the goods and imposing penalties for the removal of MRP stickers, no duty of excise was confirmed against the respondent. The Commissioner (Appeals) set aside the impugned order, emphasizing that the absence of affixing new MRPs meant the criteria for manufacture under the Central Excise Act were not fulfilled.

In conclusion, the judgment by the Appellate Tribunal CESTAT NEW DELHI, delivered by Hon'ble Mrs. Archana Wadhwa, Member (Judicial), clarified that the mere removal of MRP stickers without affixing new ones did not constitute manufacture under Section 2(f) of the Central Excise Act, 1944. The decision highlighted the importance of affixing new MRPs to alter marketability for an activity to be classified as manufacturing. As a result, the appeals filed by the Revenue were rejected, upholding the findings of the Commissioner (Appeals) regarding the non-dutiable nature of the alleged actions by the respondents.

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