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2017 (12) TMI 952 - AT - Central ExciseManufacture - MRP based valuation - allegation of the Revenue is that through their activity of packing and repacking the electric fans and re-labelling the MRP stickers on the cartons in respect of the fans which were sent outside, the appellants had engaged in the process of manufacture under Section 2(f)(iii) of the CEA - whether the activity carried out by the appellants in their Faridabad godown amounts to manufacture under Section 2(f)(iii) of Central Excise Act? - interpretation of statute. Held that: - first part of definition in Section 2(f)(iii) involves packing or re-packing of goods specified in Third Schedule in a unit container. In this regard, we find that the activity carried out by the appellants in their Faridabad godown cannot be called as packing or re-packing in unit container because as per the statement of Sh. J.P. Gupta, Dy. General Manager, four motors and four sets of blades received from their factory at Paonta Sahib were packed together in master cartons - The activity cannot be called packing or re-packing of goods in unit containers because the master carton in which four blades sets and four motors sets were packed and MRP sticker applied is not a unit container. Coming to the labelling part, which was carried out in the appellants godown, we find that at the time of receipt of goods, the said goods bore the MRP stickers valid for 10 or 11 states. However, if the said goods were to be dispatched to states other than those 10 or 11 states, the old MRP sticker was changed and a new higher value MRP sticker was affixed - The word re-labelling is followed by the inclusive part which expressly mentions alteration of retail sale price as one type of re-labelling, which on its own would amount to manufacture - the activity of re-labelling of MRP stickers or affixing higher MRP stickers as in the present case amounts to manufacture - the activity carried out by the appellants at their Faridabad godown amounts to manufacture. Extended period of limitation - Held that: - the reasoning given by the Ld. Commissioner that the appellants have pre-planned the entire things to evade the central excise duty is not convincing - there does not appear any mens rea on the part of the appellants - extended period not invokable - matter is therefore required to be remanded back to the adjudicating authority to work out the demand for normal period of limitation. Penalty - Held that: - In the absence of mens rea, the penalty is not imposable on the appellants under Section 11AC of the Central Excise Act. The penalty on other appellants under Rule 26 of Central Excise Rules, is also not imposable in the absence of any malafide intent. Appeal allowed in part - part matter remanded for purpose of re-quantification of demand for the normal period of limitation.
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