TaxTMI 
TaxTMI 
2023 (11) TMI 255
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.... the purpose they had established offices with developed infrastructure in these States to implement the said agreement which was found to be executed with the transport Commissioners of State of Rajasthan, Union Territory of Chandigarh, State of Jammu and Kashmir and Union Territory of Andaman & Nicobar. 2. To implement the above agreements, the appellant manufactured aluminum plates (HSRP blank) and the multilayer labeled stickers with various security features at their unit located in the State of Himachal Pradesh. These manufactured products are cleared by the appellant from their Kala Amb, Himachal Pradesh factory, after availing the benefit of area based exemption as stipulated under Notification No.50/2003-CE dated 10.06.2003. The exemption under this Notification is available only if the processes undertaken within that state amount to manufacture and is not available if processes undertaken within the State do not amount to manufacture. Undisputedly, for manufacture to take place, a new, distinct marketable product rust emerge. Department observed that these HSRP Blank Plates are getting processed further at various Embossing Station Office [ESO] (hereinafter referred a....
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....tickers and scrap made by the appellants during the period from January 2014 to June, 2017 alongwith the proportionate interest and the appropriate penalties. This proposal has been confirmed vide Order in Original No.19/2020 dated 05.10.2020 except that the demand of Central Excise Duty of Rs.27,856/- on scrap cleared during March, 2014 was dropped. Being aggrieved the appellant is before this Tribunal. 5. We have heard Mr. A.K. Prasad and Ms.Surabhi Sinha, ld. Counsels for the appellant and Mr. Rakesh Agarwal, Authorised Representative for the respondent. 6. Ld. Counsel for the appellant has mentioned that they have rightly availed the Area Based Central Excise Duty Exemption under Notification No.50/03 dated 10/06/2003 as the manufacture of their product i.e. HSRP and windshield stickers gets completed at their unit in Kala Amb, Himachal Pradesh itself to which is available the area based exemption of the said notification. To impress upon the correctness of the said submission, ld. Counsel has briefed about the manufacturing process of HSRPs which starts with loading of aluminium sheeting in coils of respective sizes. After clearing the surface and making it free of dust ....
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....ssed on the HSRP blank at the ESO established by the appellant in the premises of RTO and thereafter the HSRP is taken for being fitted in the motor vehicle in case of four Wheeled vehicles the third license plate (TLP)/ the windshield sticker in the form of multi layer labeled sticker gets affixed on the top inside left hand corner of the windshield of the said vehicle. 10. Ld. Counsel also clarified that appellants thereafter raise the invoices on the motor vehicle owner, for: (i) Sale of HSRP's (complete set of registration plate inclusive of snap locks and Third Licence Plate). On this value VAT was paid, but no central excise duty, since the goods were manufactured in a factory which was availing area-based exemption. (ii) Affixation and fitment of HSRPS (numbering and fixing charges for complete set of registration plates and snap locks and Third Licence Plate (wherever applicable) inclusive of the service charges for embossing and hot stamping process at the appellant's ESO's in Rajasthan. On these charges service tax was collected on the bills. RMRPL raises invoice for data entry of the details in the RTO server. On this they charge Service T....
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....d upon the following case laws:- i) Servo-Med Industries Pvt. Ltd. vs. CCE, Mumbai reported in 2015 (ELT) 578 (SC). ii) CCE, Mumbai-IV vs. Fitrite Packers reported in 2015 (324) ELT 625 (SC). iii) Union of India vs. Delhi Cloth and General Milla Co. Ltd. reported in 1977 (1) ELT (J199) (SC) iv) Union of India vs. J.G. Glass Industries Ltd. reported in 1998 (97) ELT 5 (SC) v) Metlex (I) Pvt. Ltd. Vs. Commissioner of Central Excise, New Delhi reported in 2004 (165) ELT 129 (S.C.) vi) Commissioner of Central Excise, Mumbai vs. Godfrey P)ilip (I) Ltd. reported in 2003 (156) ELT 1026 (Tri.-Mum.) 14. While rebutting these submissions, ld. Departmental Representative has impressed upon that admittedly the product manufactured at Kala Amb, Himachal Pradesh is HSRP Blank, but the product sold is the complete HSRP as different from HSRP blank. The Blank HSRP is hot plated and embossed with the registration number in Rajasthan without which HSRP Blank cannot be sold. The windshield sticker / TLP also get Complete and ready for sale not at Kala Amb but at the respective State/ UT, (in the present case the state of Rajasthan). Since these....
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....(S.C.) 3. Commissioner of Central Excise, Mumbai-IV vs. Fitrite Packers reported in 2015 (324) E.L.T. 625 (S.C.). 16. With respect to the invocation of extended period of limitation while issuing the Show Cause Notices ld. Departmental Representative reiterated the findings in para 36.1 of the Order - under- challenge wherein it has been discussed that suppression has been committed by the appellant. Arguing that there is no infirmity in the order under challenge, ld. Departmental Representative has prayed for the dismissal of the appeals. 17. Having heard the rival contentions, perusing the record and written submissions filed by the parties, we are of the considered view as follows:- To decide these appeals we need to adjudicate the following three issues:- 1. What is the product in question, when it is cleared from Himachal Pradesh and whether it gets changed when it is sold to the vehicle owner in Rajasthan? 2. What is the meaning of manufacture to understand (as to whether the activity done at ESO in State of Rajasthan can be called as the part of manufacturing process which is otherwise done in State of Himachal Pradesh). 3. Can th....
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.... including two wheelers which are sold after April 2019 to get the HSRP fixed. The amended rule 50 of CMVR also provides that these plates should be manufactured and affixed through the authorized dealers only, who are authorized by the motor vehicle department. Pursuant to said statutory mandate that the transport department of Govt. of Rajasthan invited bids for supply and affixation of HSRP on the vehicles registered in the State of Rajasthan. 21. To participate in the bid the appellant formed a consortium by setting up a Special Purpose Vehicle (SPV), which was duly registered under the Companies Act, 1956, under the name, Real Mazon (Rajasthan) Private Limited (RMRPL). The appellants were the lead member of the consortium (holding 68% equity shares). This consortium won the bid and entered into a contract with the Commissioner of Transport, Government of Rajasthan, for 'Supply and Affixing of High Security Registration Plates on Motor Vehicles in the State of Rajasthan. The contract also provided for data entry about the details of the vehicle. The registration number allotted corresponding to alpha numeric number of the HSRP and HSRP in the servers of the respective RT....
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....kers. Hence, like HSRP, these stickers are wind shield stickers but blank, when these are cleared from the factory in Himachal Pradesh and these are windshield stickers only, but embossed with specific vehicle Registration number, statutorily allotted, when it gets cleared from ESO in Rajasthan. Thus, question No.1, above is answered as : Sl. No. Product Product cleared from Himachal Pradesh Product cleared from ESO in Rajasthan 1 HSRP HSRP blank HSRP embossed with vehicle Registration 2. Windshield stickers Windshield sticker blank Wind shield sticker with vehicle Registration number printed on it. It is clear that since HSRP is cleared from Himachal Pradesh till it is sold to the vehicle owner in Rajasthan, the identity, usage, character all remain same. It is still a High Security Registration plate. So is true for wind shield sticker. The change that occurs in State of Rajasthan is statutorily prohibited to be brought in the HSRP when it is still in Himachal Pradesh. The first question as framed above is therefore answered as: "the product remains same". 24. We also observe from the record that SPV (RMRPL) is duly registered wi....
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....ion plates for vehicles are meant to curb the offenses involving motor vehicles. Accordingly, under statutory mandate, these plates are to be manufactured by the manufacturers who have been authorized by the Regional Transport Officers. 28. We observe that the marketability chain is pre-decided as is apparent from the agreement executed between the Commissioner of Transport, Transport Department for and on behalf of Governor of Rajasthan and the appellant, who is executing the said agreement after forming a consortium with the state of Rajasthan itself i.e. duly registered SPV (RMRPL). Vide the said agreement, the state of Rajasthan had selected the appellant to assemble, establish, procure technology, design, develop and produce the HSRP plate and also to emboss, affix, distribute and create complete infrastructure for the implementation of HSRP Scheme in the State of Rajasthan. There is no denial to the fact that for the activity of embossing at ESO in Rajasthan it can be done by anyone who is the successful bidder. Thus, it is not necessary that one who manufactured HSRP blank shall only be embossing the allotted registration number on these HSRP blanks. 29. Once there is ....
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....here commercially it can no longer be regarded as the original commodity but instead is recognized as a new and distinct article that a manufacture can be said to take place. Where there is no essential difference in identity between the original commodity and the processed article it is not possible to say that one commodity has been consumed in the manufacture of another. Although it has undergone a degree of processing, it must be regarded as still retaining its original identity". 32. In the given set of circumstances, specifically statutory mandate as discussed above, the processes of embossing done at ESO is held nothing but a service as good as that of printing. 33. We also rely upon the decision of Hon'ble Apex Court in the case of Union of India vs. JG Glass Industries Ltd. reported in 1998 (97) ELT 5 wherein it has been observed as follows:- "16. On an analysis of the aforesaid rulings, a two-fold test emerges for deciding whether the process is that of "manufacture". First, whether by the said process a different commercial commodity comes into existence or whether the identity of the original commodity ceases to exist; secondly, whether the commodity whic....
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...., we find that the demand of excise duty on the appellant is not sustainable for a more fundamental reason. The case of the appellant is that it is manufacturing the goods in Himachal Pradesh and hence it is entitled to the benefit of exemption notification No.50/2003-CE. The case of the Revenue is that the appellant is not manufacturing in the factory because the processes it undertakes do not amount to manufacture. If indeed, the processes do not amount to manufacture, as the Revenue asserts, then the appellant's activities do not fall within the charging section - section 3 of the Central Excise Act, 1944 and no excise duty can be charged and the exemption notification is itself irrelevant. The appellant will not have to take registration, file returns or be governed by any of the provisions of the Central Excise Act. 37. The case of the Revenue is that manufacture is taking place at various ESOs in Rajasthan. Unlike some other laws, Central Excise required every manufacturing unit to be registered, maintain records and file returns: Duty is payable on removal of goods from each manufacturing facility. For instance, if a company has its head office in, say Mumbai, where activ....