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2015 (2) TMI 833 - AT - Central ExciseArea based exemption in Jammu & Kashmir - Denial of Cenvat Credit - Manufacturing activity - Labeling / relabeling & Repacking of imported goods being Coco Butter and Coco Powder - Enhance the marketability of the product - proceedings were initiated against the appellant to deny the CENVAT Credit taken by them and consequently denying the rebate claim sanctioned to the appellant along with interest and penalty - Extended period of limitation - Held that:- In the case for the duty paid by Jammu unit, the Jammu unit has taken the refund and the Taloja unit has also taken the CENVAT Credit of the duty paid by Jammu unit. If instead of Jammu, the manufacturing unit would have located in some other area where the benefit of Notification No.56/2002 is not available, then it would be alleged the activity of labeling/relabelling amounts to manufacture. As similar issue came before this Tribunal in the case of United Distributors [2015 (1) TMI 983 - CESTAT MUMBAI] wherein the facts of the case are that the appellant was engaged in the activity of importing and trading of goods. The goods imported by the appellant were required to pay duty on MRP basis as per Section 3 of the CTA 85. The appellant was fixing sticker in their warehouse after clearance of the goods by discharging duty on the basis of MRP less abatement, the Revenue issued a show-cause notice to the appellant on the premise the activity of fixing stickers amount to manufacture as per Section 2(f)(iii) of the Central Excise Act, 1944. In that case also the goods after importation, wherever it was found that label/sticker was damaged or missing, the activity of labeling of sticker on the said goods took place and the contention of the appellant was that, their activity does not amount to manufacture. In that case, we held that as the activity of fixing MRP stickers took place after clearance of goods from Customs. Therefore, as per Section 2(f)(iii) of the Central Excise Act, 1944, the activity undertaken by the appellant amount to manufacture. In that case, we held that merely putting the stickers shall amount to manufacture. Therefore, following the said decision, we are of the confirmed view that in this case also the activity of fixing labels undertaken by the appellant, which is not in dispute, shall amount to manufacture as per Note 3 of Chapter 18 of the CETA although this activity does not enhance the marketability of the product. On limitation, we find that the activity of affixing the additional label and availlment of CENVAT Credit was known to the department during the impugned period as the appellant were filing their returns regularly and obtained registration for the activity of affixing label on the packages. Further, the issue in question is that whether the labeling/relabelling amount to manufacture or not as per Note 3 to Chapter.18 of CETA although the goods are already marketable needs interpretation of statute. Therefore, the demand for extended period of limitation is also not sustainable. Decided in favour of appellant.
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