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2010 (8) TMI 366 - CESTAT, MUMBAIManufacture – Deemed manufacture - As per the relevant Chapter Notes (chapter 29 and 38), “the repacking of goods from bulk packs to retail packs, re-labelling of the containers or the adoption of any other treatment to render the products marketable to the consumer” amounted to ‘manufacture’. - With regard to the goods covered by Heading 33.07, the deeming provision was introduced only w.e.f.1-3-2003with the amendment of Section 2(f) (definition of “manufacture”) of the Central Excise Act. - for the period prior to 1-3-2003, there was no “deemed manufacture” in respect of repacking, re-labelling etc. of bulk packs of such goods and, therefore, during such period, the appellant was not liable to pay duty on the retail packs. Appellant is entitled to exemption from payment of duty on the retail packs of goods falling under Headings 33.01 and 33.02 for the entire period of dispute and partial exemption from payment of duty in respect of the retail packs of goods falling under Heading 33.07, the duty liability in the latter case arising only w.e.f. 1-3-2003. It goes without saying that, when duty is paid on the finished goods (retail packs), CENVAT credit of the duty paid on inputs should be allowed to the manufacturer. This aspect should also be covered in de novo proceedings. As regards penal liability under Section 11AC, needless to say that its re-determination is called for in de novo proceedings.
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