TaxTMI 
TaxTMI 
2010 (1) TMI 437
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....ion No.02/95-Central Excise dated 04.01.1995 ? B. Whether or not the Commissioner of Customs is entitled to demand duty short paid while denying the benefit of Notification No.02/95 dated 04.01.1995 on a finding that the activity undertaken by importer for clearance of goods in DTA does not amount to manufacture where it is clarified in Notification No. C-32/40/97-TRV dated 06.05.1997 that the exemption under Notification No. 01/95 does not require manufacture of only "excisable goods"? C. Whether in the facts and circumstances of the case, the Tribunal is justified in holding that levy of penalty under Rule 173Q of the Central Excise Rules, 1944 read with Section 11AC of the Central Excise Act, 1944 could not be upheld on the ground that the demand of Central Excise Duty under Section 11AC of the Act could not be upheld as there is no manufacture and despite having held in para 2.1(d) that the processes undertaken by the respondent are to be treated as processes amounting to "manufacture" in terms of Notification No. 133/1994 ? D. Whether the Tribunal in the facts and circumstances of the present case, is justified in holding that the imposition of joint 100% mandatory pe....
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....earing for the Revenue and Mr. Paresh M. Dave, learned advocate appearing on Caveat for the respondent-assessee. 3. For the sake of convenience facts are taken from Tax Appeal No.722 of 2006. The brief facts giving rise to the present tax appeal are that the respondent assessee is an Unit established in Kandla Special Economic Zone earlier known as Kandla Free Trade Zone, in terms of permission granted by the Ministry of Commerce under its letter dated 18.12.1984 for manufacturing, cosmetics and toilet preparations like perfumes, EAU-D-Toilette, after shave, talc powder, deodorants. As per Condition No. (iii) of the said permission letter, Unit was permitted to import cosmetics and performance in bulk and not in finished form in consumer packs. Subsequently, vide letter dated 12.10.1999 of the Deputy Commissioner, Kandla Free Trade Zone (hereinafter referred to as 'KFTZ'), the respondent was granted permission to import cosmetics and toiletries in bulk and export the same after reassembling, testing and repacking in assorted sizes in different cartons subject to the unit obtaining a separate no objection certificate from KFTZ Customs in all such cases. 4. The respondent wa....
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....imposed penalty on the respondent. 7. Being aggrieved by the order of the Commissioner, the respondent preferred Appeal before CESTAT, Mumbai which came to be decided on 30.05.2005 in favour of the respondent assessee by setting aside the order of the Commissioner. 8. It is this order of the Tribunal which is under challenge in the present tax appeal. 9. Ms. Yajnik, learned Standing Counsel appearing for the Revenue has submitted that the process employed by the the respondent is not amounting to manufacture under Section 2 (f) of the Central Excise Act, 1944. The goods in question sold as such could not have been construed as repacking from bulk packing to retail packing. The respondent has not undertaken any treatment to make the products marketable nor the physical aspect of the product was changed or modified by the use of processes employed by the respondent. The same did not amount to manufacture under Section 2 (f) of the Central Excise Act, 1944. The exemption to the imported goods is subject to the conditions that the goods are used in the manufacture or the processing of goods by the respondent in the Free Trade Zone. The notification is a conditional one and the....
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....he field staff that broader view is called for in respect of the interpretation of the provisions of notification No.1/95-CE. There is no such provision that if there is no manufacture under the Central Excise Act, duty of customs is a foregone conclusion. The demand under the Central Excise Act cannot be confirmed as the goods were removed to Domestic Tariff Area are manufactured and contained Ethyl Alcohol and are preparations thereof. In this view of the matter, the levy itself is not called for and proceedings under Section 11A of the Central Excise Act could not have been initiated. If there is no levy of duty under the excise laws, there is no question of penalty or interest. He has, therefore, submitted that the Tribunal has rightly reversed the order passed by the Commissioner and decided the appeal in favour of the respondent assessee. The findings recorded by the Tribunal are based on the notifications and the decisions of the Apex Court and hence, no substantial questions of law can be said to have arisen out of the order of the Tribunal and hence, appeal deserves to be dismissed. 12. We have considered the rival submissions made by the learned Counsels appearing for ....