TaxTMI 
TaxTMI 
2014 (12) TMI 618
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....V of the CBEC's Excise Manual. The Applicant along with the said declaration also submitted Input -Output Ratio in respect of 'Car parts' as input as well as finished goods, process flow-chart and layout of functional area where manufacture/processing of export goods was proposed to be done. The Group officer in- charge along with sector officer visited the premises of the applicant on 15.10.2010 and it was reported that the applicant showed them the working area only and explained the process verbally as nil material was present. " No physical process was in existence at that time. A letter dated 22.10.2010 was issued to the applicant in reply to the applicant letter- dated 20.10.2010 stating that "as per your letter, the parts we intend to export are not going through any of the process and we are procuring manufactured parts in bulk on payment of duty and the same will be exported as it is without any individual label or pack It appears from your letter that goods meant for export as listed in statement of, `Input- Output Ratio` are being procured from market and are being exported as such without any process as merchant exporter only. In terms of paragraph 8 under heading `Expo....
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....rs located across the country. These suppliers clear their manufactured auto parts on payment of excise duty under-the cover of an invoice. The applicant receives various automotive parts in bins, trolleys. These bins do not have lids and are covered with the help of plastic gauze & Velcro. Each bin has .a certain number of parts kept inside it. Also a sticker having information about the part No., Supplier Name, Part Name, etc is attached on the said bins. The suppliers of the applicant also send packing sample cards along with the goods sent These parts are thereafter inspected by the applicants personnel :as per the inspection sheet for any apparent defects. The instruction sheet clearly shows that inspection. is undertaken with the object that various elementary defects in the auto parts can be identified. The inspection has to be strictly done as per the instruction sheet. After testing, a stamp indicating "Ok" is-put on the surface of the box. The goods as received after, if is inspected, are stored in the part storage Location of the factory. After inspection, the said parts are moved to the Inner Packaging Line for undertaking he' process of packing. In the said line, t....
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....ses of testing and attachment of certificates carried out by the-assessee made the product marketable to the customer and hence amounted to manufacture. A similar reasoning was followed by the hon'ble Tribunal in the matter of Nestle India Ltd. vs. CCE Chandigarh-II- 2011(270) ELT 575 (Tri-Del.) wherein it was held that even if a product was marketable, rendering some sort of process on the product to render the same marketable to a particular class of consumer, would amount to manufacture. 4.4 The applicant submits that the CBEC had issued Circular No. 342158/97-0X dated 8.10.1997 laying down clarification as to how to determine whether the activity of packing or re-packing or labeling amounts to manufacture. The applicant submits that it was inter alia clarified that the expression "Packing" is considered as package containing a pre-packed commodity where the quantity of product contained therein is predetermined, the packing is generally done without the presence of purchaser and the packages contain information, such as name of the manufacturer, quantity, value and other details of the product. The applicant further submits that the expression "unit container" has not been def....
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....ns such as filing' declarations etc, in compliance with the subject' Notification dated 06.09.04. Therefore it is submitted that the applicant is entitled to the rebate on export of the said parts. 4.6 The Commissioner (Appeals) 'has relied upon Circular No. 6/3/2009*DS (CX1& 4) dated 16.12.2009, and has held' that mere reliance on a chapter note will not justify any process as being akin to 'manufacture'. It is submitted that the above observation of the Commissioner is incorrect and unsustainable. It is submitted that the said circular is in the context of dealers receiving liquid chemicals in drums of 200 Itrs from bulk trucks and, whether the said process of off-loading of chemicals from bulk tucks to 200 Itrs drums amounted to 'manufacture'. This was in the context of Chapter Note 10 of Chapter 29 the Central Excise Tariff Act,1985 read with Section 2(f)(ii) of the Central Excise Act,-1944-The Board, placing reliance on the judgment of the Hon'ble Tribunal in Ammonia Supply Co- 2001 (131) ELT 626, where in it has been held that there is no repacking from bulk packs to retail packs and hence there is no manufacture. The applicant submi....
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.... directly covered by the judgment of the Revisionary Authority in the case of In Re: A. V. Industries- 2011 (269) ELT 122(GOI). 4.9 The Value Addition Certificate produced by the applicant fortifies the stand of the applicant fortifies that the applicant undertakes deemed manufacture work and the processes undertaken by the applicant contribute to the value of the packed goods. Further it is submitted that the interpretation by the Commissioner (Appeals) that each process of packing and labeling, as the case may be is to be done from the perspective of making the product marketable, is incorrect and unsustainable. It is submitted that the definition of deemed manufacture as provided under Section 2(f) (iii) deems each of the individual processes of packing and labeling as amounting to manufacture. There is no condition precedent or embargo placed on the activities of packing and labeling , in the said definition, to the effect that these activities have to be carried solely to make the product marketable. It is submitted that irrespective of whether these processes make the product marketable, the same would amount to manufacture nonetheless. 4.10 The applicant submits that the r....
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....eliance upon the order of the Revisionary authority in the case of In Re: A.V. Industries - 2011 (269) ELT 122 (GOI). Relevant Paragraphs of the same are reproduced as under "8. The only objection of the department is that the respondent did not carry out any process of manufacture of the inputs received and exported as such, so Notification No.21/2004-CE. (N. T.), dated 6-9-2004 is not applicable in their case, hence no rebate on the inputs is available to them, whereas the respondent has submitted that they carry out testing and re-packing etc., before exporting the inputs received by them, In this connection, let us peruse Rule 18 of the Central Excise Rules, 2002 which reads as under: "Rule 18. Where any goods are exported, the Central Government may, by notification grant rebate of duty paid on such excisable goods or duty paid on materials used in the manufacture or processing of such goods and the rebate shall be subject to such conditions or limitations, if any, and fulfilment of such procedures, as may be spec....