TaxTMI 
TaxTMI 
2009 (9) TMI 55
X X X X Extracts X X X X
X X X X Extracts X X X X
....R RULING (By J.K. Batra, Member) - The applicant claims to be a subsidiary company of a foreign holding company namely M/s Guthy Renker India. Ltd., Port Louis, Mauritius. The applicant proposes to manufacture various skin care products in India. For this purpose the applicant proposes to import four products, namely, Proactiv Solution Revitalizing Toner, Proactiv Solution Renewing Cleanser, Proactiv Solution Repairing Lotion and Proactiv Solution Refining Mask. "Proactiv Solution" appears to be a brand name. These products are claimed to be effective for treatment of a skin disease commonly known as acne. 2. The applicant states that it proposes to effect the sales of the four imported products individually as well as in kits. The....
X X X X Extracts X X X X
X X X X Extracts X X X X
....lly and will be sold as a kit which will contain the individual products. The aforesaid labelling will be undertaken at the port itself. These products will be taken to the applicant's factory where the following activities will take place - (a) Labelling of products (b) Putting of the product literature into the kits (c) Packing of products into two types of kits (d) Labelling including declaration of maximum retail price on the kits The two types of kits will comprise of the following individual products. Proactiv Solution Kit - I (1) Proactiv Solution Revitalizing Toner (2) Proactiv Solution Renewing Cleanser (3) Proactiv Solution Repairing Lotion (4) Proactiv Solution Refining Mask Proactiv Solutio....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... namely Proactiv Solution Revitalizing Toner, Proactiv Solution Renewing Cleanser, Proactiv Solution Repairing Lotion and Proactiv Solution Refining Mask at applicant's factory amounts to manufacture under the excise law? In view of the clarification provided by the applicant during the course of hearing and confirmed by the applicant's counsel in his letter dated 4th August, 2009, since the labelling operation on the individual containers meant for retail sale separately (Category -I products) would be carried out at the port of import itself and no labelling is proposed to be carried out at the factory premises, this question is not anymore relevant. Question (2) What is the classification of the four individual products namely Proa....
X X X X Extracts X X X X
X X X X Extracts X X X X
....question whether labelling of such individual products would constitute manufacture under the excise law is not required to be answered. In so far as preparation and labeling of kits is concerned, as per note 6 to Chapter 30, in relation to products of heading 3003 or 3004, conversion of powder into tablets or capsules, labelling or re-labelling of containers intended for consumers or re-packing from bulk packs to retail packs or adoption of any other treatment to render the product marketable to the consumer would be construed as manufacture. Similarly the aforesaid processes have been specified to be amounting to manufacture in relation to products of heading 3303, 3304 & 3305 by virtue of note 5 to Chapter 33. The process of putting 3....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ution Revitalizing Toner (2) Proactiv Solution Renewing Cleanser (3) Proactiv Solution Repairing Lotion would also merit classification as a medicament under tariff 3004 90 99 of the Central Excise Schedule, since two of the three products are specifically designed for treatment of acne. The fact that one of the products(Toner) in the kit has no therapeutic effect, but is a step in aid for the usage of other medicinal products does not in anyway affect the classification under the heading 3004. Question. 5 Whether the four individual products namely Proactiv Solution Revitalizing Toner, Proactiv Solution Renewing Cleanser, Proactiv Solution Repairing Lotion and Proactiv Solution Refining Mask as well as the Proactiv Solution Kit-I ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... dated 24th December, 2008). In this context, our ruling in the connected application under the Customs Act i.e. AAR No. 1/2009(Cus) may be referred to. It is relevant to mention that the applicant has also stated in the Application that "duty would be payable based on MRP less 35% abatement". Question 6. In case the activities mentioned at (a) and (c) above amount to manufacture, whether the applicant can take credit of CVD & SAD paid on the imported inputs and capital goods, excise duty paid on the indigenous inputs & capital goods and service tax paid on input services under Rule 3 of the Credit Rules? Whether the credit can be utilized for the payment of excise duty on the final products (kits or individual products)? Since the ac....