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2022 (1) TMI 496 - HC - Customs100% EOU - Process amounting to manufacture or not - labelling and repacking of the imported goods - inter-unit transfer - Chartered Accountants Certification is sufficient proof for co-relating to the transfer and receipt of goods or not - applicability of CBEC Circular No.314/30/97/CE dated 06.05.1997 - HELD THAT:- There is considerable force in the arguments advanced by the learned counsel for the respondent inasmuch as the goods said to have been diverted from Bengaluru unit to Venkatapur unit, both being 100% EOUs. On this inter-unit transfer of the raw material, the issue is squarely covered by COMMISSIONER VERSUS SUNIL KUMAR JAIN [2015 (9) TMI 1687 - SC ORDER] confirmed by the Hon'ble Apex Court. The finding of the Tribunal is based on this judgment and the same cannot be faulted with - Similarly, no exception can be found with the reasons assigned by the Tribunal in arriving at a decision regarding the eligibility of olives sold in the domestic market which is in conformity with the provisions of the Foreign Trade Policy 2004-2009 as explained by CBEC Circular No.7/2006-Cus, dated 13.01.2006. In the case of COMMISSIONER OF CENTRAL EXCISE, MUMBAI VERSUS JOHNSON & JOHNSON LTD. [2005 (9) TMI 85 - SUPREME COURT], the Hon'ble Apex Court considering the meaning of ‘manufacture’ in the context of Section 2(f) of the Central Excise Act, 1944, has held that the repacking would have to be from bulk packs to “retail packs” so as to render the product marketable directly to the consumer, wherein it was contended that there was repacking and labelling of the medicaments before sale to the dealer and stock transfer to other depots. It is significant to note all these judgments relates to Section 2(f) of the Central Excise Act, 1944. It is not in dispute that in the present case, we are dealing with 100% EOU, wherein Foreign Trade Policy is applicable, wherein Chapter - 9 provides for definition clause. In terms of the said definition clause - 9.37, “manufacture” means to make, produce, fabricate, assemble, process or bring into existence, by hand or by machine, a new product having a distinctive name, character or use and shall include processes such as refrigeration, re-packing, polishing, labelling, re-conditioning repair, remaking, refurbishing, testing, calibration, re-engineering. Manufacture, for the purpose of FTP, shall also include agriculture, aquaculture, animal husbandry, floriculture, horticulture, pisciculture, poultry, sericulture, viticulture and mining - Circular No.314/30/97-CX, dated 06.05.1997 issued by the Government of India, Ministry of Finance (Department of Revenue) deals with the subject of scope of the term “manufacture” in Notification No.1/95–CE with respect to 100% EOU. The said Notification clarifies that a broader view is called for in respect of interpretation of the provisions of Notification No.1/95-C.E. and the exemption may not be restricted only to cases where “manufacture” under Section 2(f) of the Central Excise Act, 1944 is involved. It is clarified that the term “manufacture” for the purpose of export is wider in meaning than that used in Section 2(f) of the Central Excise Act, 1944. In the light of this Foreign Trade Policy and Circular, a wider meaning has to be given to the term “manufacture”. “Repacking and labeling” is construed to be “manufacture” in terms of the said Foreign Trade Policy which is applicable to the case on hand - there are no reason to interfere with the finding of the Tribunal on this point. The appeal stands dismissed.
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