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2014 (8) TMI 132 - AT - Central ExciseDeemed Manufacture - affixing labels and MRPs on the individual packages of cosmetics and toilet products - department is of the view that the activity of affixing labels and declaring MRPs amounts to ‘manufacture' as the products are notified under the 3 rd Schedule to the Central Excise Tariff Act and therefore, the activity of labelling and affixing MRP amounts to manufacture - Held that:- The excise duty demand on imported goods contained in packages of above 10 grams or 10 ml. is not sustainable in law as the activity of labeling/affixing MRP is a statutory requirement before goods are allowed to be cleared for home consumption and therefore, the import is complete only after these activities are undertaken. Further no additional excise duty liability accrues as the additional customs duty (CVD) liability has been discharged on the MRP affixed and the entire exercise is revenue neutral. As regards the goods contained in packages of 10 grams of 10 ml. or less, the activity of labelling/re-labelling would amount to "manufacture" as there is no statutory requirement of undertaking the said activity before their import can be allowed. However, the appellant would be eligible to take cenvat credit of the CVD paid on such goods. Further, as the entire activity was undertaken with the knowledge and permission of the Customs authorities, the allegation of suppression of facts does not sustain and the duty demand is sustainable only for the normal period of limitation. Since the issue relates to interpretation of law, there is no warrant for imposition of any penalties. Thus the matter is remanded back to the adjudicating authority only for the limited purpose of re-computation of duty demand for the normal period and allowing cenvat credit of the CVD paid on the imported goods, subject to the appellant producing the necessary documentary evidence in this regard. - Decided partly in favour of assessee.
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