TMI Blog2014 (12) TMI 167X X X X Extracts X X X X X X X X Extracts X X X X ..... of toothpaste tubes, we are prima facie view that the same would be covered by the definition of manufacture. Thus the activity of the appellant, prima facie, is manufacture of toothpaste. There is no dispute that the Khasra No. in which the unit is situated is specified in the Notification No. 50/2003-C.E. and the goods alleged to be manufactured are also covered by this notification - The purpose of the declaration required to be filed in terms of the conditions (i) and (ii) of the Notification No. 50/2003-C.E. is to enable the jurisdictional central excise authorities to ascertain whether the manufacturer is eligible for the exemption after ascertaining as to whether the unit is located in the Khasra No. specified in the notification and whether the goods manufactured are covered by the exemption. We find that all the information as mentioned in the condition (ii) of the notification, Khasra No. and address of the appellant, nature of their activity, etc., was contained in the letter dated 11-10-2007 and 1-11-2007 submitted by CPIL. Beside this, the appellant under impression that their activity is Business Auxiliary Service, had taken service tax registration and were payin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng one 200 gm. toothpaste tube, one 100 gm. toothpaste tube and one toothbrush - the toothbrush was being given free by CPIL to the buyers of the promo/combo pack. The appellant, after repacking the toothpaste tubes and toothbrush into combo pack/promo pack were sending the same back to CPIL. The appellant had applied for and had been given by the Department, a service tax registration number and during the period of dispute were paying service tax on the packing charges being received by them from CPIL. CPIL who were availing full duty exemption under Notification No. 50/2003-C.E. in respect of toothpaste manufactured by them, had given the required declaration to the Department for availing of this exemption and vide letter dated 11-10-2007 addressed to AC, Shimla had also intimated that they would be making promo/combo packs of 200 gm. and 100 gm. tubes with one free toothbrush and for this purpose, the goods to be packed along with cartons would be sent to the appellant s unit for packing into combo pack. 1.3 In January, 2009, the Department examined the activity of the appellant in detail, and conducted inquiry with the partner of the appellant firm. The department was of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spensed with the condition of pre-deposit and allowed the stay petition unconditionally and as such the impugned order lacks consistency. Hon ble High Court directed this Tribunal to consider the stay application afresh and pass fresh orders after affording an opportunity for hearing to the petitioners. In this regard, Para 12 of the order of Hon ble High Court is as under - 12. For all the above reasons, we are of the view that the stand taken by the Tribunal while passing the impugned orders require fresh consideration. Accordingly, we set aside Annexure P-18 and P-23 and all other dependent orders. There will be a direction to the Tribunal to consider Annexure P-16, stay application referring to all relevant factors referred to above and pass fresh orders after affording an opportunity for hearing to the petitioners. The writ petition is allowed as above. Pending applications, if any, shall also stand disposed of. 1.9 Accordingly the stay application was taken up for de novo decision. 2. Heard both the sides. 3. Shri Vikram Nankari, Advocate, the learned Counsel for the appellant, pleaded that the appellant whose unit is located in the area notified in exemption No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion (i) of the notification was not filed, that in the circumstances of the case, the non-filing of declaration by the appellant in terms of condition (i) of the notification is not fatal, that in this regard he relies upon Tribunal s judgment in case of Vasanthan Enterprises v. CCE, Chandigarh [Stay Order No. 933/2011-EX, dated 22-9-2011] [2012 (279) E.L.T. 61 (Tri. - Del.)], Aditya Packaging v. CCE, Meerut-II [2009 (245) E.L.T. 543 (Tri.-Del.)] M/s. Shivam Enterprises [Stay Order No. 159/2012-EX, dated 23-1-2012] [2012 (279) E.L.T. 479 (Tri. - Del.)], that in any case, since the appellant were repacking the toothpaste and toothbrush into combo pack for CPIL on job work basis, the declaration filed by CPIL has to be treated as the declaration filed by the appellant for Notification No. 50/2003-C.E., that in any case, bulk of the demand raised for period from October, 2007 to June, 2009 vide show cause notice dated 4-2-2010 is time-barred, as in view of the declarations dated 11-10-2007 and 1-11-2007 made by CPIL declaring the activity of the appellant and letter dated 28-1-2008 of CPIL and the fact that the appellant was registered as service provider and the department was coll ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er the appellant have prima facie case in their favour. 7. The undisputed facts in this case are that - (1) The appellant s unit is located at Khasra No. 382/62/1, Village Judikalan, Baddi, Tehsil Nalagard, Distt. Solan (H.P.) and this Khasra No. is covered by the exemption Notification No. 50/2003-C.E. and the products being packed are also covered by this notification; (2) The appellants are engaged only in repacking - i.e. packing of toothpaste tubes of 200 gm. and 100 gm. individually packed in retail packs and toothbrushes, received from CPIL s unit, also located in the area specified a Notification No. 50/2003-C.E., into a promo pack/combo pack - the carton for promo pack/combo pack with the particular of contents and MRP printed on them are also received from CPIL; (3) While the toothpaste has been manufactured by CPIL is their unit in specified area of Himachal Pradesh (i.e. area specified in Notification No. 50/2003-C.E.), the toothbrush which is given free and is also packed in promo pack/combo pack has been manufactured outside Himachal Pradesh; (4) While CPIL before starting clearances of toothpaste, had vide their letter dated 11-10-2007 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oming first to the question as to whether the activity of the appellant amounts to manufacture under Section 2(f)(iii) of the Central Excise Act, 1944; Section 2(f), reads as under :- Manufacture includes any process - (i) x x x (ii) x x x (iii) which, in relation to the goods specified in the Third Schedule, involves packing or repacking of such goods in a unit container or labelling or relabelling of container including declaration or alteration of retail sale price or adoption of any other treatment on the goods to render the product marketable to the consumer . Toothpaste and toothbrushes are mentioned in Third Schedule to the Central Excise Act, 1944. The process undertaken by the appellant involves making promo packs/combo packs of toothpaste and toothbrush (to be given free) so that each combo pack contains one 200 gm. toothpaste tube, one 100 gm. toothpaste tube and one toothbrush. The 100 gm. toothpaste tube, 200 gm. toothpaste tube, toothbrush and combo pack carton with contents and MRP printed, are received from CPIL. Since this process involves repacking and change of MRP of toothpaste tubes, we are prima facie view that the same would b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of the notification containing the condition is reproduced below :- Provided that the exemption contained in this notification shall apply subject to the following conditions, namely - (i) The manufacturer who intends to avail of the exemption under this notification shall exercise his option in writing before effecting the first clearance and such option shall be effective from the date of exercise of the option and shall not be withdrawn during the remaining part of the financial year; (ii) The manufacturer shall, while exercising the option under condition (i), inform in writing to the Jurisdictional Deputy Commissioner of Central Excise or Assistant Commissioner of Central Excise, as the case may be, with a copy to the Superintendent of Central Excise, giving the following particulars, namely - (a) name and address of the manufacturer; (b) location/locations of the factory/factories; (c) description of inputs used in manufacture of specified goods; (d) description of specified goods products; (e) date on which option under this notification has been exercised. The appellant s plea is that since full information about t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emption under Notification No. 50/2003-C.E. could not be denied just on the ground that before effecting clearances they did not file the required declaration. In the circumstances of the case, what the Department seeks is an impossibility - more so when from the facts of the case, it appears that the Department from very beginning had all the information about the location of the appellant s factory and nature of their activity and could have told the appellant that the activity is excisable. The Apex Court in the case of Formica India Division v. CCE reported in 1995 (77) E.L.T. 511 (S.C.) has held that when the intermediate goods produced by the assessee were held to be liable to duty, the assessee s claim for benefit of exemption Notification No. 71/71-C.E. in respect of their final product cannot be turned down on the ground that they did not comply with the procedure prescribed under Rule 56A of the Central Excise Rules, 1944. The Apex Court in the case held that the appellant should be permitted the benefit of Notification No. 71/71-C.E. in respect of their final product by complying at later stage with the requirement of Rule 56A. We are of prima facie view that the ratio o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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