TaxTMI 
TaxTMI 
2014 (8) TMI 132
X X X X Extracts X X X X
X X X X Extracts X X X X
....iod of demand, orders-in-original No. and dates and the duty demands confirmed are detailed in the table below: S.No. SCN No. & Date Period of demands Order-in-original No. & Date Duty Demand confirmed Appeal No. 1. V/Adj(SCN)/15-188/RGD/12-13/11827 dt. 30/11/2012 & V/Adj(SCN)15-369/RGD/12-13/1707 dt. 19/04/2013 Oct 2011 to 16/03/12 & 17/03/12 to 30/06/12 80-81/MAK (80-81)/Commr/RGD/13-14 dated 14/10/13 15,64,22,270 38,22,950 16,02,45,220 E/85380/14 & E/85381/14 2. DECEI/MZU/I&IS "C"/30-43/10/7051/1869 dated 06/12/10 01/03/09 to 31/01/10 11/AT(11)/Commr/RGD/12-13 dated 29/08/12 3,19,98,347/- E/85419/13, E/1816 & 1817/12 E/1830 & 1831/12 3. V/Adj/SCN/15-134/Loreal/DGCEI/I/Th-I/2010 dated 4/11/10 1/10/2005 to 31/01/09 15/BR-15/Th-I/2011 dt. 31/03/11 58,34,11,854 E/1109 & 1110/11 4. The issue involved in all these appeals is common and therefore, they are taken up together for consideration and disposal. 5. The appellant, M/s. L'Oreal India Pvt. Ltd., is a manufacturer of cosmetics and toilet products. They also import these materials from abroad and market the same in India. Before undertaking the marketing in India, the appellant undertakes th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....MRPs, etc. were undertaken at these godowns and the Customs had granted permission to the appellant for the activities to be undertaken outside the Customs area on execution of bond and bank guarantee. For the period prior to 26/02/2010, since there was no procedure prescribed by the Customs authorities, they had cleared the goods on execution of bond and bank guarantee for undertaking the activities of re-packing and re-labelling, etc. and the customs duty (CVD) liabilities were discharged on the basis of the revised MRPs. Alternatively, it is pleaded that if excise duty is to be paid on the activity of labeling, declaration of MRP, etc. the appellant would be eligible for the Cenvat Credit of CVD paid on the goods which has not been granted to the appellant. Since the entire activity was undertaken with the knowledge of the department, invocation of extended period of time cannot be sustained in law. Accordingly, it is pleaded that the impugned demands are not sustainable and needs to be set aside. 7. The learned Special Consultant appearing for the Revenue on the other hand contends that affixing of label, stickering of MRP, etc. before clearances into DTA makes the product mar....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... common name of the commodity packed; (c) Net quantity in terms of standard unit of weights and measures. If the net quantity in the imported package is given in any other unit, its equivalent in terms of standard units shall be declared by the importer; (d) Month and year of packing in which the commodity is manufactured or packed or imported; (e) Maximum retail sale price at which the commodity in packaged form may be sold to the ultimate consumer. This price shall include all taxes local or otherwise, freight, transport charges, commission payable to dealers, and all charges towards advertising, delivery, packing, forwarding and the like, as the case may be. 8.2 There is no dispute that cosmetics and toiletries imported by the appellant which are in packages of more than 10ml. or 10 grams are covered under the provisions of Standards of Weights and Measures (Packaged Commodities) Rules, 1977. Therefore, there is a statutory requirement to affix labels and declare MRPs before the goods are cleared for home consumption. Prior ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he importers/representatives of the trade". 8.3 There is no dispute that the appellant obtained private bond warehousing licence with effect from 26/02/2010 and had undertaken the activity prior to clearance of the goods into DTA. For the period prior to 26/02/2010, the appellant was taking out the goods for labeling, affixing of MRPs, etc. into private warehouses/godowns by executing a bond and bank guarantee with the Customs and after affixing the labels, the bond was discharged and the goods were cleared into DTA. Therefore, even for the period prior to 26/02/2010, the activity of affixing labels/declaring MRPs was undertaken when the goods were under the Customs control and before they were released into DTA. The question is whether the activity of labeling, re-labelling, affixing of MRP, etc. undertaken on imported goods, in respect of which there is a statutory requirement, would amount to 'manufacture', when the goods are still under Customs control. 8.4 A somewhat similar issue came up for consideration before the Hon'ble Apex Court in the case of Garden Silk Mills Ltd. Vs. UOI - 1999 (113) ELT 358 (SC). One of the issues for consideration in that case was when do....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... liability would accrue as the basis of valuation and rate of duty remain in the same for both customs duty and excise duty. Therefore, demand of excise duty on goods contained in packages more than 10 grams or 10 ml is only an exercise in futility as the entire exercise is revenue neutral. Therefore, demand of excise duty on these goods are clearly and unequivocally unsustainable in law and merits to be set aside. 8.6 As regards the goods contained in packages of 10 grams or 10 ml, or less, there is no statutory requirement of affixing MRP or labeling both under the Packaged Commodity Rules, 1977 or the Drugs and Cosmetics Rules, 1945. Under Rule 34 or the Packaged Commodities Rules, the provisions of the said Rules do not apply to any packages containing a commodity if the net weight or measure of the commodity is ten grams or ten ml. or less, if sold by weight or measure. Similarly exemption from certain labelling requirements is available in respect of cosmetics and toilet preparations in packages of 10 grams of 10 ml. or less under Rule 148 of the Drugs & Cosmetics Rules, 1945. Therefore, in respect of such goods, the labeling/re-labelling etc. or adoption of any other treatm....