2024 (3) TMI 226

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....ty of packing/repacking, labeling/relabeling. The department was of the view that the said activity did not amount to 'manufacture' as per Section 2f (iii) of the Central Excise Act, 1944. Accordingly, show cause notice dt. 6.3.2014 was issued to the appellant proposing to deny the credit availed by them and to demand the same along with interest and for imposing penalty. After due process of law, the original authority disallowed the credit, confirmed the demand, interest and imposed penalty. Aggrieved by such order, the appellant is now before the Tribunal. 2. Ld. Counsel Shri Raghav Rajeev appeared and argued on behalf of the appellant. It is submitted that during the disputed period, the appellant had imported various appliances from BSFIM Germany. The said packages are imported with the pre-affixed label mentioning the Maximum Retail Price (M.R.P). On receipt of the goods by the unit, the appellant paid the Countervailing duty (CVD) and availed cenvat credit of such duty. The goods imported were stored in the appellant's warehouse. To transport the goods to the warehouse, they engaged a logistics service provider for transportation. During transportation, some of the packages....

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....has revoked the registration vide order issued on 09.06.2014. It is prayed that the appeal may be dismissed. 6. Heard both sides. 7. The issue is whether the disallowance of cenvat credit alleging that the activity does not amount to 'manufacture' is legal and proper. The case of the department is that the activity undertaken by the appellant after import of the goods in the nature of packing / repacking, labelling / relabelling does not amount to 'manufacture'. We have to say that the appellant has discharged Central Excise duty on the products during the disputed period. For this reason, the department cannot disallow credit alleging that the activity does not amount to 'manufacture' . We draw support from the decision of the Tribunal in the case of Ajinkya Enterprises (supra) and Luk India Private Ltd. (supra). The relevant part of the decision of M/s.Luk India Private Ltd. is reproduced as under : "3.2 The issue is only with regard to the eligibility of credit availed on the goods cleared from Unit 1 to Unit 2. It is an undisputed fact that the appellant has cleared all goods from unit 2 by payment of duty. When the department has collected duty on the finished products, th....

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....the credit. Admittedly in this case, the appellant cleared the said imported goods after refilling on payment of duty. Therefore, if the activity does not amount to manufacture, in that case, the duty paid by the appellant shall amount to reversal of credit. Therefore, the appellant is not required to reverse the credit of CVD availed by the appellant at the time of import. 3.4 In the case of M/s. R K Packaging Vs. CCE, Mumbai 2019-TIOL-988-CESTAT, Mumbai, the issue considered was whether the credit availed has to be reversed when the activity is alleged to be not manufacture. The demand was set aside by the Tribunal following the decision of the Hon'ble High Court of Bombay in Ajinkya Enterprises. The relevant para reads as under: "5. We have carefully considered the submissions advanced by both sides. The short issue involved for determination in the present case is whether the appellant is entitled to CENVAT Credit of duty paid on various inputs used in or in relation to assembly of packing kits, on which appropriate duty was paid by the appellant. The Revenue proposed to deny the credit only on the ground that the assembly of various inputs into packing kits does not amount....

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....on of the Revenue is that since the process of manufacture undertaken on the raw material did not amount to 'manufacture', within the definition of Section 2(f) of the Central Excise Act, 1944, hence, the appellant was not required to discharge duty, accordingly, not entitled to avail credit on the inputs. We find that the issue is no more res integra being covered by the judgement of the Hon'ble Bombay High Court in the case of Ajinkya Enterprises (supra). The Lordships, after taking note of the relevant provisions of law, observed as follows:- "10. Apart from the above, in the present case, the assessment on decoiled HR/CR coils cleared from the factory of the assessee on payment of duty has neither been reversed nor it held that the assessee is entitled to refund of duty paid at the time of clearing the deoiled HR/CR coils. In these circumstances, the CESTAT following its decision in the case of Ashok Enterprises- 2008 (221) E.L.T. 586 (T) = 2008-TIOL-312-CESTAT-MAD. 'Super Forgings-2007 (217) E.L.T. 559 (T) 2007-TIOL 2040- CESTAT-MAD 'S.A.L.L.-2007 (220) E.L.T. 520 (T) 2009 (15) ST.R. 640 (Tribunal), M.P. Telelinks Limited - 2004 (178) E.L.T. 167 (T) = 2004-TIOL-77-CESTAT-DEL....