TaxTMI 
TaxTMI 
2023 (12) TMI 374
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....ty/ factory in Tehsil Nalagarh, District Solan, HP started in September 2007. M/s Colgate manufacture the toothpaste in their factory situated at Baddi, District Solan, Himachal Pradesh and purchase the toothbrush manufactured in Goa; M/s Colgate send the manufactured tubes of 100gm toothpaste and purchased toothbrush to the appellants for completing the packing. M/s Colgate avail the exemption contained under Notification No.50/2003 dated 10.06.2003 as amended. The appellants under the impression that they are providing "Business Auxiliary Service" to M/s Colgate have registered themselves for payment of service tax and have been duly discharging the applicable service tax on the job charges received by them from M/s Colgate. 2. The appellants informed the Assistant Commissioner of Central Excise vide letters dated 11.10.2007, 01.11.2007 and 28.01.2008 informing that the activities undertaken by them. Consequent to an investigation initiated by the Department, the appellants informed the Department that Revenue was under an erroneous assumption that the appellant was engaged in manufacture vide their letter dated 20.02.2009 and have given declaration, in terms of Notification No.....
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.... 01.11.2007 and 28.01.2008, the details required as per the said notification giving all the particulars and facts; the benefit cannot be denied just because the declaration was not on the letter head of the appellant. He relies on the decision of the Tribunal in the case of Gillette India Limited - 2011 (272) ELT 154 (Tri. Del.). He further submits that even if the appellant is required to submit the declaration, delayed submission of the same on 20.02.2009, cannot take away the substantial right available to the appellants. He relies on the following cases: Krsna Urja Projects Ltd. - 2019 (366) ELT 839 (Tri. All.) Controls & Switchgears Company Ltd. - 2017-TIOL- 1960-CESTAT-DEL. Alumeco India Extrusion Ltd. -2010 (249) ELT 577 (Tri. Bang.) Jai Maa Appliances (P) Ltd. - 2015 (329) 387 (Tri. Del.) 4.1. Learned Counsel for the appellants submits additionally that condition for furnishing a declaration is mere procedural and substantive benefit of exemption cannot be denied for the same as held by the Hon'ble Apex Court in the case of Harichand Shrigopal- 2010 (260) ELT 3 (SC); in a similar case, Vasantham Enterprises - 2015 (37) STR 1007 (Tri. Del.) [affirmed by the Hon....
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....hat the letters given by M/s Colgate cannot be overstretched to mean a declaration by the manufacturer in terms of the Notification No.50/2003; the letter dated 11.10.2007 gives a revised declaration intends to inform that M/s Colgate intend to manufacture combo pack consisting of colgate dental cream 200gms + Colgate dental cream 100gms manufactured at their Baddi Factory + one toothbrush to be given free of cost and that at that time, M/s Colgate did not have the facility to manufacture combo pack in their premises; M/s Colgate vide their letter dated 01.11.2007 indicated that they are sending their goods, fully manufactured and marketable, to the job workers (the appellant) and that Notification No.214/1986 is not applicable. 8. Learned Authorized Representative further submits that the appellant's reliance on M/s Man care International Private Limited is misplaced as the Tribunal has held that the benefit under the Notification No.50/2003 cannot be granted to the appellants retrospectively; the facts of the case of M/s Man care International are different to the extent that they have availed SSI exemption till 03.11.2009 and started availing exemption under Notification No.50/....
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....ve retrospective effect and the Adjudicating Authority has clearly dealt with this aspect. He further submits that the activity undertaken by the appellant amount to manufacture and as such the appellants are not covered under taxable service of "Business Auxiliary Service". He relies on the following cases: Prime Healthcare Products - 2009 (245) ELT 550 (Tri. Ahmd.) and 2011 (272) ELT 54 (Guj.)_ Colgate Palmolive (India) Ltd. - 2009 (248) ELT 930 (Tri. Bang.). Mancare International Pvt. Ltd. - 2018 (363) ELT 432 (Tri. Del.) Maha Lakshmi Packages- 2015 (329) ELT 823 (Tri. Del.) Satyabrat Swain - 2015 (316) ELT 106 (Tri. Del. Ambey Cement and anothers - 2005 (1) SCC 368 = 2004 (178) ELT 55 (SC). Dilip Kumar & Company - 2018 (361) ELT 577 (SC). Eagle Flask Industries -2004 (171) ELT 296 (SC). Gillette India - 2009 (235) ELT 5 (HP) VVF Ltd. - 2020 (372) ELT 495 (SC). 11. Heard both sides and perused the records of the case. The brief issues that require decision in the impugned case are as to whether: (a) the activity undertaken by the appellants amounts to manufacture. (b) the appellants are eligible for the exemption contained in the Notification N....
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....cture‟. The appellants contend that no new marketable product emerges out of the process undertaken by them and therefore, the process does not amount to manufacture. On going through the show-cause notice, we find that the learned Commissioner records that the noticee receives 200gms toothpaste duly packed in promo pack carton which contains the following declarations: (a) Name of the manufacturer of the toothpaste, which is CPIL, Solan, Himachal Pradesh. (b) Name of the manufacturer of the toothbrush, which is M/s Logic Plastic Pvt. Ltd., Daman. (c) Total net weight of the pack i.e. 300gm with two tubes of 200gm and 100gm each. (d) Declaration that the pack contains one-piece free toothbrush. (e) Maximum retail price with the breakup of the individual retail price of 200gm and 100gm toothpaste. (f) Declaration that the toothbrush is free. (g) Description and pictorial declaration that the Promopack contains "Colgate" brand 200gm and 100gm toothpaste with free toothbrush into this Promopack, the Noticee inserts 100gm toothpaste and a free toothbrush. 14. We find that having given the entire description of the combi pack received by the appellants and their act....
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....in no case makes the goods marketable. Therefore, we hold that the process undertaken by the appellant does not amount to manufacture. 17. Revenue relies on the decisions of the Tribunal in the case of Prime Healthcare Products (supra) and M/s Colgate Palmolive India Ltd. (supra). We find that the ratio of the cases is not applicable on the facts of the cases. In both the cases, the issue involved was manufacturing of combi packs by the original manufacturers and not the job-workers and it was held that the same amounts to manufacture in that context. In the impugned case, the appellants are only inserting the 100gm toothpaste and a toothbrush into the combi pack which already contained 200gm toothpaste. The combi pack with all other ingredients including the MRP is supplied by M/s CPIL, the original manufacturers. In a way, the appellants are completing the process of packing already initiated by the principal manufacturer. The appellants returned the combi packs to the original manufacturer i.e M/s CPIL, who is liable for payment of duty on the combi packs cleared by them. In the impugned case, M/s CPIL are availing exemption contained under Notification No.50/2003 and therefore....
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....lable. Therefore, by undertaking the activity in the specified area, the appellants have made themselves eligible as per the substantial condition of the notification. In such circumstances, it has to be held that the declaration is only procedural. Moreover, all the details as required as per the notification have been furnished by M/s CPIL. The appellants are eligible for the exemption contained in the Notification No.50/2003 as the declaration was filed late. We find that the Tribunal in the case of Vasantham Enterprises (supra) held that: 12.5 Primary object of the Notification No. 50/2003-C.E., dated 10-6-2003 is to grant duty exemption to manufacturing units situated in the area specified therein subject to fulfilment of conditions prescribed therein read with the Board Circular No. 908/2009-CX, dated 23-12-2009 as well as Circular No. 757/73/2003-CX, dated 22-10- 2003 [F. No. 201/54/2003-CX-6]. It is not in dispute that the appellant was situated in the specified area of Himachal Pradesh and entitled to the exemption benefit granted by the notification read with the Board circulars. However relying on the copy of agreement dated 1-9-1977 and Board Circulars, the appellant ....
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.... Ltd. v. C.C.E.]" [Emphasis supplied] 15. Apex Court in Commissioner of Customs (Preventive), Mumbai v. M. Ambalal and Company, (2011) 2 SCC 74 = 2010 (260) E.L.T. 487 (S.C.), (in which one of us was the party) has observed that the beneficial notification providing the levy of duty at a concessional rate should be given a liberal interpretation : "16. It is settled law that the notification has to be read as a whole. If any of the conditions laid down in the notification is not fulfilled, the party is not entitled to the benefit of that notification. The rule regarding exemptions is that exemptions should generally be strictly interpreted but beneficial exemptions having their purpose as encouragement or promotion of certain activities should be liberally interpreted. This composite rule is not stated in any particular judgment in so many words. In fact, majority of judgments emphasise that exemptions are to be strictly interpreted while some of them insist that exemptions in fiscal statutes are to be liberally interpreted giving an apparent impression that they are contradictory to each other. But this is only apparent. A close scrutiny will reveal that there is no real con....
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....iling benefit under the notification. The declaration was incomplete inasmuch as details were not given. This information is relevant for knowing and verifying whether the finished goods can be made out of such inputs. It thus appears that the noticee is not entitled to the benefit of Notification No. 50/2003- C.E., dated 10-6-2003." Such recording leads to the conclusion that the appellant was entitled to cure the defect providing necessary particulars for consideration of its claim of exemption under the notification above since it was primarily entitled to the area based exemption being situated in the specified area of the State of Himachal Pradesh. 19. Registration of the appellant under Finance Act, 1994 and its existence in the specified area of Himachal Pradesh, as well as its activity carried out as job worker of HUL was well known to record. Appellant bonafidely believed that it was not manufacturer and not liable to Excise duty and if held to be manufacturer, it is entitled to the exemption by Notification No. 50/2003 read with the Board circulars aforesaid. There is nothing on record to show that either appellant or HUL suppressed any fact to the authority. Record al....
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....filled the conditions of the notification making themselves eligible for availing the benefit thereof. We find support from the observation of Allahabad Bench of the Tribunal in the case of Krsna Urja Projects Ltd. wherein it is held as under: " 4. Being aggrieved, the appellants are before this Tribunal. The Learned Counsel for the appellants urges that the issue is no longer res integra and the same are decided in favour of the appellants vide the precedent orders of this Tribunal. So far the merits are concerned. A similar issue came up before this Tribunal in the case of M/s. Controls & Switchgears Company Ltd. v. Commissioner of Central Excise, Meerut-I, reported in 2017-TIOL-1960-CESTAT-Delhi. Wherein under similar facts and circumstances, under the same Notification No. 50/2003-C.E. this Tribunal held, intimation to the Department about the option for claiming benefit of the exemption appears to be only procedural requirement. A liberal attitude, therefore, has to be taken in this regard, when the assessees otherwise are entitled to the benefit of exemption notification. It was also observed that exemption provisions have to be complied with strictly, but some latitude may....