TaxTMI 
TaxTMI 
2021 (9) TMI 255
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.... wrongly availed credit of Rs. 6,33,22,839/- (Rupees Six Crores Thirty Three Lakhs Twenty Two Thousand Eight Hundred Thirty Nine Only) under provisions of Rule 14 of Cenvat Credit Rules, 2004 read with Section 11A(10) of the Central Excise Act, 1944. 3. I demand interest at the appropriate rate under Rule 14 of Cenvat Credit Rules, 2004 read with section 11AA of the Central Excise Act, 1944, which shall be collected on the amount of Rs. 3,39,465/- being the amount of credit availed and utilized by the assessee. 4. I impose a penalty of Rs. 6,33,22,839/- (Rupees Six Crores Thirty Three Lakhs Twenty Two Thousand Eight Hundred Thirty Nine Only) under the provisions of Rule 15(2) of Cenvat Crdit Rules, 2004 read with section 11AC(1)(a) of the Central Excise Act, 1944. However, the penalty will be reduced to 25% of the above amount if the assessee pays the duty determined along with interest within 30 days of receipt of this order. The reduced penalty 25% of the amount of duty so determined is available to the assessee only if the 25% of the penalty is also paid within the period of th....
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....with section 11AA of the Central Excise Act, 1944, which shall be collected on the amount of Rs. 8,79,455/- being the amount of credit availed and utilized by the assessee. 4. I impose a penalty of Rs. 5,28,28,266/- under the provisions of Rule 15(2) of CENVAT Crdit Rules, 2004 read with section 11AC(1)(a) of the Central Excise Act, 1944. However, the penalty will be reduced to 25% of the above amount if the assessee pays the duty determined along with interest within 30 days of receipt of this order. The reduced penalty 25% of the amount of duty so determined is available to the assessee only if the 25% of the penalty is also paid within the period of thirty days of receipt of this order. Otherwise the penalty imposed under Section 11AC(1)(a), equal to the duty amount will remain." 2.1 We have heard Shri Prakash Shah, Advocate, for the appellants and Shri S.K. Mathur, Special Counsel, for the Revenue. 2.2 Learned counsel for the appellants submits that • the issue involved in this case is in respect of deemed manufacture whereby the process of labeling, relabeling,&nbs....
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.... amendment is made with a view of separate each of the activities covered by note 3 to Chapter 18 to be independent activities and each of them deem to be manufacture. 6.9 In my view, labelling per se will amount to manufacture in view of the first part of note 3 of Chapter 18. There is no requirement in said note 3 that the labelling should enhance the marketability. It only the last part of note 3 that provides for adoption of any other treatment to render the product marketable. The note 3 is deeming provisions. It deems three of the specified activities as deemed manufacture. 6.10 In view of admitted position both in the show cause notice and in the impugned order that the Appellant have undertaken the activity of labelling, I agree with Member (Judicial) that that the activity of the appellant is covered by note 3 to Chapter 18 and the activity of the Appellant of labelling the goods received from Jammu factory amounts to manufacture. 6.11 Both sides relied upon the judgment of the Hon'ble Apex Court in the case of Liquide North India Pvt. Ltd. - 2011 (271) ELT ....
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....oisture, purification, quality, also amounted to relabeling of the gas cylinders. For re-labelling purposes, it is not essential that label should be re-fixed on the article, it would be enough if the same is issued along with the item to the consumer." 6.14 In the above context, the Hon'ble Supreme Court of India in paragraph 21 held as under: "21. So far as the issue with regard to re-labelling is concerned, we are in agreement with the view expressed by the Tribunal that re-labelling would not mean mere fixing of another label. When the Appellant was selling different certificates to its different customers, we can say that the appellant was virtually giving different marks of different labels to different cylinders having different quality and quantity of gas." 6.15 It can be seen that what is approved by the Hon'ble Supreme Court of India is the findings of this Tribunal in paragraph 6 to the effect that for re-labelling purposes, it is not essential that label should be re-fixed on the article, it would be enough if the same is issued along with the item to the consum....
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....ticks in one carton instead of 12 lipsticks of one colour. In view of these facts, the Tribunal observed that the process should be one which confers upon a product the attributes of marketability which it did not possess earlier. The vitamins, in the original form, do not have the attribute of marketability as inter-mixtures of vitamins which the treatment rendered by the appellant has attributed. Similarly in Lupin Laboratories case [2002 (139) E.L.T. 366 (Tri. - Mumbai)] = 2002-TIOL-500-CESTAT-MUM, four tablets were put in a single pack with a view to maintain the continuity and regularity of intake of these four drugs which were the main anti-tuberculosis drugs. These four tablets were not mixed together to form only one tablet. We, therefore, hold that the process carried out by the appellant render the product marketable as inter-mixture of vitamins and as such the activity amounts to manufacture." 6.19 In pursuance of a remand order passed by the Hon'ble Supreme Court of India, this Tribunal in its order reported in 2009 (235) ELT 577 held as under: "70. While applying the law la....
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....the appellant replaced the cartons by removing the old cartons and repacking them in new cartons and labelling undertaken on the new cartons. Show Cause Notice Paragraph 4 ".... "It is claimed by the assessee that in case of imported Cocoa Butter all boxes of imported Cocoa butter are removed and are replaced by the boxes with printed matter as described above in case of material received from J&K. After this same labelling process mentioned above is undertaken in respect of imported goods also" Paragraph 5.1 "....The samples of the labels and packing material were withdrawn under Panchanama dated 14.8.2012........." "....In case of imported goods replacing the same in new boxes and labelling is under taken..." Paragraph 5.2 "....No packing or repacking activity is undertaken at Taloja Unit, except in the case imported goods...." 6.23 I find that from page 140 of the appeal paper book shows that the tare weight of the cartons at the time of import, which varied from 0.550 grams to 1 Kg., whereas the tare weight of carton used by ....
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.... in which they were imported. 6.28 In my view the contents of the label affixed on the imported cartons cannot be the decisive factor to hold that no repacking and labelling has been done on the imported cocoa butter. Neither the show cause notice nor impugned order proceeds on the basis that contents of the label affixed on the exported coco butter raises doubt about repacking. The show cause notice admits and accepts that repacking is done on the imported coco butter, no dispute can be raised by the learned Commissioner on repacking of imported coco butter. 6.29 I am in full agreement with the learned Member (Judicial) that the activity of labelling undertaken by the appellant amounts to manufacture in terms of note 3 of chapter 18 of CETA, 1985." 3.3 We also take note of the submissions made by the learned Special Counsel. As reported at 2016 (336) ELT A183 (SC), the order of the Hon'ble Supreme Court has just issued the following order:- "Delay condoned. Issue notice." Since no stay granted, we are not in agreement with the submissions made by the learned Sp....