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2022 (1) TMI 448 - AT - Central ExciseProcess amounting to manufacture or not - re-packing from the bulk of imported chemical to a smaller packing and re-labeling thereof - whether the process amounts to manufacture or is merely a trading activity? - extended period of limitation - HELD THAT:- It is observed that sub-clause (5) of Rule 3 of Cenvat Credit Rules, 2004, which has been relied upon by the adjudicating authority below while confirming the demand against the appellant, comes into picture only when the inputs on which Cenvat Credit has been taken, are removed, “as such‟, from the premises of the importer/ manufacturer. As already discussed above, the imported inputs have undergone such changes at the end of the appellant that may be called as manufacture prior those inputs were cleared by the appellant. It becomes abundantly clear that clearance of inputs “as such‟, is an absolute wrong finding of the adjudicating authority and hence rule 3 (5) of CCR, 2004 does not apply. The authority has totally ignored the amendment which has come into effect in Chapter Note 10 of Chapter 29 post 1st of March, 2008. Even the case law as relied upon by the adjudicating authority also pertains to the period when the activity both of re-packing from bulk to retail containers and re-labeling thereof was manufacture but post amendment either of these activity being done with respect to the imports that the clearance of said inputs post said activity will be manufacture. The findings of adjudicating authority on this aspect are therefore liable to be set aside. Extended period of limitation - HELD THAT:- There is also no denial that show cause notices were issued to the appellant for the same reason as in the present appeal for the immediately prior period (2005- 2011). It does not lie in the mouth of the Department to still allege suppression. Otherwise also the entire dispute appears to be revenue neutral - there appear no revenue consequences. No reasons appear to be available with the appellant to have mala fide intent to evade duty. No evasion is otherwise apparent on part of the appellant. Thus, extended period is held to have wrongly been invoked by the Department. Show Cause Notice itself gets hit by period of limitation. Appeal allowed - decided in favor of appellant.
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