TaxTMI 
TaxTMI 
2013 (6) TMI 633
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....ter & Coco Powder on payment of duty. The applicant also takes the credit of duty their on thereafter applicant affixed two labels described as label 1 and label 2 or the goods procured by them and same were exported on payment of duty. Thereafter, the applicant filed rebate claim which were sanctioned to them. Revenue is of the view that putting label A and label B on the boxes does not make the product marketable to the consumer. Therefore, same does not amount to manufacture as the product is already marketable before affixing label. Therefore, show cause notice issued and impugned order was passed confirming the above said demands. The applicants are seeking waiver of pre-deposit of the same on the premise that as per the Note 3 to Chapter 18 of the Central Excise Tariff Act, 1985, the activity of labeling or re-labelling of containers or repacking form bulk packs to retail packs or the adoption of any other treatment to render the product marketable to the consumer, shall amount to manufacture. 3. The Ld. Counsel submits that it is an admitted position by the adjudicating authority that applicants are putting labels i.e. label A & label B on the carton. Therefore as per Note ....
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....redit not availed wrongly thereafter the factory stuffing was allowed. Further, the rebate claim has been sanctioned to the appellants by following procedure laid down in Rule 18 of the Central Excise Rules read with Notification No. 19/2004. Prima facie we are of the view that demands for extended period cannot be demanded at this stage. As show cause notice was issued on 9.10.2012 and rebate claim was sanctioned in 2011-12 to the tune of Rs. 3,39,70,960/-. Therefore, at this stage we direct the applicant to make a pre-deposit of Rs. 1 Crore within eight weeks. On such compliance the remaining demands of duty, interest and penalty shall remain stayed during the pendency of the appeal. Compliance is to be reported on_______________. (Pronounced in Court on ..............................) Per: P.K. Jain I have gone through the order recorded by my Ld. Brother Member (Judicial). However, my view both on facts and decision are at variance with that of Ld. Brother. 8. The brief facts of the case are that the applicant has a unit at Jammu, where they manufacture Coco Butter and Coco Powder. Goods are fully manufactured and can be sold or exported in the condition in which these are ....
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....istry of Finance (Department of Revenue) No. 56/2003-Central Excise, dated the 25th June, 2003 [ G.S.R. 513 (E), dated the 25th June, 2003] or 71/2003-Central Excise, dated the 9th September, 2003 [G.S.R.717 (E), dated the 9th September, 2003] or No. 20/2007- Central Excise, dated the 25th April, 2007 [G.S.R. 307(E), dated the 25th April, 2007], the rebate shall not be admissible under this notification." Thus, in brief, if the goods manufactured in J&K availing exemption vide Notification NO. 56/2002-CE and 57/2002-CE are exported out of India, no rebate of excise duty is allowed/granted under the excise law. 11. In order to circumvent the said law, the applicant adopted an ingenious method. Goods manufactured in J&K, availing exemption from payment of duty, were brought to Mumbai. Coco butter was packed in corrugated and card board boxes each containing 25 Kgs. of Coco butter. Each corrugated box had two similar labels to indicate content, net weight manufacture's name, marketers name etc. This was the position at the time of clearance at J&K and receipt in Mumbai. Goods could have been exported straightaway. However, before exporting, two extra but similar labels were affixed ....
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....subject matter of large numbers of disputes and in the famous case of DCM, the Apex court has described the three attributes of the manufacture viz., distinctive name, character or use. The expansive definitions in various Chapter notes/Section Notes etc. are generally extension of these three attributes and try to capature value addition, due to carrying of certain process/activities on the goods already manufactured- particularly after introduction of Modvat Credit scheme etc.) Process/Activities of course have to have some purpose generally with reference to these three attributes. In the present case, process or activity of putting two extra labels has no such purpose. This is not even covered by Note 3 of Chapter 18, as the goods are already labeled. Putting extra label particularly when all the relevant information is already available on the product is not even labeling. There is no relabeling or any other process mentioned in Note 3. In fact, this Tribunal in catena of cases where label/sticker was put on the goods, has taken view that activity does not amount to manufacture. Many of such judgment s have the approval of Hon'ble Supreme Court also. Infact, in some cases, the....
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....port (without getting in stuffed in presence of Excise Inspector and large number of exporters do that). Factory stuffing is an activity for customs purposes and is therefore under Customs Law and nothing to with Central Excise Law. In any case, stuffing Inspector is not an authorized under law to decide about correctness of Cenvat Credit or duty Leviability or whether activity amounts to manufacture. There is no evidence that the officer who supervised factory stuffing was aware that the refund of duty is being claimed twice. Even if he was aware I would only amount to his collusion in the nefarious activity of the applicant. Applicant cannot be allowed to take advantage of all his intentional wrongs in the name of factory stuffing by Inspector. Similarly, while sanctioning the rebate, officers are required to check that goods have been exported (i.e. left the country) and duty was paid and the rebate claim is as per the duty paid. One must appreciate, there is hierarchy of officer and various offices within Central Excise Department. Each officer is authorized to exercise certain power/duties. Just because an Inspector has supervised stuffing of container, one cannot say that dep....
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....icient justification for granting of stay. Balance of convenience has also to be seen. Hon'ble A.P. High Court in the case of SQL Star International Ltd. vs. C.C. Hyderabad reported in has observed that the balance of convenience must be clearly in favour of making an interim order and that should not be slightest indication of a likelihood of prejudice to the interest of revenue. I am therefore of the view that in the circumstances of the case balance of convenience lies that amount is paid/deposited to public exchequer. I also note that applicant has not pleaded any financial hardship. Even otherwise, all that is being asked is deposit of refund twice, and freezing of credit, financial hardship cannot be a reason to pay back the same. 20. In view of proceeding paras, we order (a) Applicant to deposit in cash an amount of Rs. 13,22,30,368/- (Rupees Thirteen Crores Twenty Two Lakhs Thirty Thousand Three Sixty Eight). (b) Freeze the Cenvat Credit amounting to Rupees Nine Crore Eight Lakhs Twenty Three Thousand Three Hundred Eighty Four only (23,02,53,752-13,22,30,368=98023384) or the balance of credit available, whichever is lower. (c) On ....