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2024 (3) TMI 588 - AT - Central ExciseProcess amounting to manufacture or not - activity of “labelling or relabeling, declaration by affixing fresh Maximum Retail Price (MRP) stickers” on each unit pack, by altering the retail price stickers already affixed on the watches - demand of central excise duty on the watches cleared by them after labelling/relabeling, affixing fresh MRP stickers - demand based on statements of Store Manager of Showroom at Hosur and General Manager (Commercial) - alleged wilful suppression with intent to evade payment of duty against the showrooms and CFA premises or not - Extended period of limitation - HELD THAT:- The department does not have a case that appellant has for the first-time mentioned brand name Titan, or any such new details while affixing the fresh MRP stickers. The appellant has merely changed the MRP in fresh stickers. The distinction between a label and an MRP sticker was analysed in the case of COMMISSIONER OF C. EX., NEW DELHI VERSUS PANCHSHEEL SOAP FACTORY [2002 (4) TMI 152 - CEGAT, NEW DELHI]. A sticker merely containing the name of importer and MRP was held to be not a ‘label’. In common parlance, a label on a product is understood to contain description of the goods, its character, usage, expiry date etc., A label is a brief and quick information to the consumer as to the details of the product. A MRP sticker is information about its price only. The Tribunal in the said case was considering Note 6 to the Chapter 34 which is similarly worded as 2 f (iii). It was held by Tribunal that simply putting a MRP sticker does not amount to manufacture. It was also observed that the products were already marketable and the activity of affixing the MRP sticker did not enhance its marketability. Again, the allegation is that the activity of affixing altered MRP amounts to deemed manufacture. There is no allegation that such activity has rendered the product marketable to the ultimate consumer. In the case of Lakme Lever Ltd., Vs CCE [2000 (10) TMI 96 - CEGAT, MUMBAI], the Tribunal observed that the process/activity should attribute marketability to the product which was otherwise not marketable. In the case of CCE Vs. Rafique Malik [2018 (1) TMI 109 - BOMBAY HIGH COURT] similar issue was considered. It was held that affixing brand name on finished footwear received in labelled boxes affixed with MRP did not amount to manufacture. The meaning of marketability is that the goods must be capable of being bought and sold as such. In order to fall within definition of ‘manufacture’, the process or activity must bring some transformation to the article in such manner that was not present on the article earlier. In the present case the watches are already marketable and the affixing of MRP does not enhance marketability. From the discussions above and following the decisions there are no hesitation to conclude that the activity does not amount to manufacture. The factory at these places have not discharged duty as they have availed benefit of ABE notification. The demand, if any can be raised only against the manufacturer. As no manufacturing activity has taken place at Showrooms and CFAs, the duty demand raised against them cannot be sustained. The issue on merits is answered in favour of appellant and against the Revenue. Time Limitation - Suppression of facts or not - HELD THAT:- The issue is purely interpretational. The issue as to whether the activity of affixing MRP amounts to manufacture has always been under litigation based on facts of each case. The department has not adduced any positive act of suppression against the appellant. The revised price list was available for perusal in the accounts maintained by appellant - there are no suppression of fact with intend to evade payment of duty on the part of the appellant. The show cause notice is time barred. The issue on limitation is answered in favour of appellants and against Revenue. The impugned orders are set aside. The appeals are allowed.
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