TaxTMI 
TaxTMI 
2022 (1) TMI 448
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.... the manufacture of their final products and effects clearances of their final products on payment of Central Excise Duty. However, during the course of audit of records of the appellant, it was observed that the appellant has imported Butenol and Acetic Acid as their inputs and has availed the Cenvat Credit of 4% Additional Duty of Customs (SAD) paid on the said import in terms of section 3 (5) of Customs Tariff Act, 1975 alongwith the Additional Duty of Customs (CVD) paid under Section 3 (1) of the said Act alongwith Education Cess and Higher Secondary Education Cess. The Department alleged that the records of the appellant revealed that the said imported inputs were cleared, as such, on regular basis by the appellant under the invoices o....
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....dit is absolutely wrong. Re-packing inputs from bulk to retail or their re-labeling amounts to manufacture in view o Chapter Note 10 to Chapter 29 of Central Excise Tariff. Hence, the adjudicating authority has wrongly held they cleared imported inputs as such form the factory thereby wrongly denying the Cenvat Credit on the said inputs. To support that the activity of re-packing / re-labeling amounts to manufacture, ld. Counsel has laid emphasis upon Chapter Note 10 of Chapter 29 of Central Excise Tariff Act, 1985. Ld. Commissioner has therefore, wrongly applied Rule 3 (5) of Cenvat Credit Rules, 2004. Ld. Counsel has relied upon the decision in the case of V.G. Steel Industry vs. CCE reported in 2011 (271) ELT 508 and has also relied upon....
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....hallenge. Appeal is prayed to be dismissed. 5. After hearing the rival contentions, perusing the record, and the order under challenge we observe as follows:- 1) The appellants were importing Butanol and Acetic Acid in bulk and were re-packing the same in smaller packs of their own brand. 2) Those smaller packs were cleared by the appellant on payment of Excise Duty. 3) Cenvat Credit in respect of CVD paid on the chemicals imported by the appellant as input has also been availed by the appellant. 6. Allegation leveled is that importing the chemical and selling the same, "as such‟, is merely a trading activity, which cannot be defined as manufacture, hence, not leviable to excise duty nor the appellant ....
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.... and sub-clause (iii) specifically says that packing or reconditioning of any goods or even relabeling of containers amounts to manufacture. When this section is read alongwith the amendment in Chapter Note 10 of Chapter 29 it becomes abundantly clear that the repacking of chemicals into a smaller packs and relabeling thereof, the activity gets squarely covered under the definition of manufacture and it cannot be called as the trading activity of clearance of imported inputs "as such‟. Rule 3 of Cenvat Credit Rules, 2004 allows a manufacturer or producer of final products to take, inter alia, Cenvat Credit of CVD paid under section 3 (1) of Customs Tariff Act, 1975, Education Cess and Higher Secondary Education and SAD paid on import.....