TMI Blog2011 (5) TMI 714X X X X Extracts X X X X X X X X Extracts X X X X ..... ability. - E/444-447/2009-Mum. - A/373-376/2011-WZB/C-II/(EB) - Dated:- 13-5-2011 - S/Shri M.V. Ravindran, P.R. Chandrasekharan, JJ. Shri V.S. Sejpal, Advocate, for the Appellant. Shri Kishorilal, SDR, for the Respondent. [Order per : P.R. Chandrasekharan, Member (T)]. These appeals are directed against the order-in-original No. 01-02/PD/Th-II/2009 dated 28-6-2009 dated 5-1-2009 passed by the Commissioner of Customs, Central Excise, Thane-II and also requesting for stay of the recovery of the dues adjudged in the said order. 2. The impugned order dealt with two show-cause notices namely show-cause notice F.No. VI/PI/Th-II/30-16/2006/10662, dated 30-3-2007 and F.No. VI/PI/Th-II/30-16/2006/10662, dated 28-8-2008 issued to the appellant, M/s. TVC Sky Shop Limited. In respect of the first show-cause notice dated 30-3-2007, the learned Commissioner held that the goods, valued at Rs. 2,17,76,550/- (MRP Value) and having assessable value of Rs. 1,29,88,935/- involving Central Excise duty of Rs. 21,91,795/-, were liable to confiscation under Rule 25 of the Central Excise Rules, 2002. Since the goods had been provisionally released the Commissioner granted an option ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndigenous consumer goods, such as Cordless Iron, Vaccum Cleaner, Hair Curier, Hair Dryer, Hair Remover, Mosquito Repellants, Articles etc. After receipt of the said consumer goods in their warehouse, the appellant had labelled them by affixing fresh maximum retail price (MRP) stickers on each and every unit pack, which were sold in the local market at the said price, which were found to be much higher than the price declared to the customs at the time of importation. It was further found that no labels or stickers showing the RSP declared to the customs at the time of importation were available on the goods which were lying in their warehouse at the time of search by the officers. Sine some of the goods dealt with by the appellants were specified in the Third Schedule to the Central Excise Act, 1944 in respect of which packing or repacking of the goods in a unit container or labelling or relabelling of container including the declaration or alteration of retail sale price (RSP in short) on it or adoption of any other treatment on the goods to render the product marketable to the consumer amounted to manufacture as per Section 2(f)(iii) of the Central Excise Act, 1944, it appeared t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any pecuniary benefits from the alleged short-levy; (v) The penalty imposed on the employees are based on assumption and presumption, conjectures and surmises and, therefore, they are liable to be set side. 5. During the arguments before the Tribunal they have further submitted that as follows : (1) Since bulk of the goods are imported goods, on which duty liability (CVD) has been discharged on the basis of MRP, no further duty liability is attracted if the MRP is altered thereafter; (2) The activity undertaken by them does not amount to manufacture because the goods received by them are already in a marketable condition and by changing the MRP, they have not undertaken any activity amounting to manufacture; (3) Some of the goods on which the duty has been confirmed do not at all figure in the Third Schedule to the Central Excise Act, 1944, and therefore do not come under the purview of deemed manufacture; (4) The demand is barred by limitation and they have relied on the following judicial pronouncement in support of the above contentions. [1] Nizam Sugar Factory v. Collector of Central Excise - 2006 (197) E.L.T. 465 (S.C.) = 2008 (9) S.T.R. 314 (S.C.) [ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e been undertaken as per the instructions of the Chairman of the appellant-company, namely, Shri Vinod Agarwal and was done with the active support and co-operation of the General Manager, Shri Nitin Patki, they are liable to penalty under Rule 26 of the Central Excise Rules, 2002. In support of the above contention, the learned DR has relied on the following judgments, namely,- (a) Rafique Mallick v. Commissioner of Central Excise, Mumbai-I - 2006 (193) E.L.T. 200 (Tri. - Mumbai) (b) Titan Industries Ltd. v. Commissioner of Central Excise, Chennai. 2007 (217) E.L.T. 423 (Tri. - Chennai) (c) Gilloram Gauri Sankar v. Collector of Central Excise, Patna - 1994 (70) E.L.T. 389 (Tribunal) (d) M/s. TVC Sky Shop Ltd. v. Union of India Anr. in Writ Petition No. 4912 of 2006 (e) 1995 (502) GJX 391 (S.C.) (f) 1988 (512) GJX 460 (S.C.). 7. With regard to the claim of the appellant for CENVAT credit the learned DR submits that no evidence has been produced by the appellant before the adjudicating authority proving their eligibility to CENVAT credit and therefore, the learned Commissioner has rightly denied their claim for CENVAT credit. 8. We have care ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ept of deemed manufacture under Section 2(f)(iii) of the Central Excise Act. 10. We find that all these heading numbers figure in the Third Schedule to the Central Excise Act, 1944 and, therefore, the provisions of Section 2(f)(iii) of the Central Excise Act are attracted and the said provisions are reproduced below : 2(f) manufacture includes any process, - (i) . (ii) . (iii) which, in relation to the goods specified in the Third Schedule, involves packing or repacking of such goods in a unit container or labelling or relabelling of containers including the declaration or alteration of retail sale price on it or adoption of any other treatment on the goods to render the product marketable to the consumer. (iv) . From the definition of manufacture as given above, it is clear that labelling or relabelling, declaration or alteration of retail sale price on the products or adoption of any other treatment to make the product marketable to the consumer would amount to manufacture. From the materials seized at the time of search and from the statements given by the various employees of the company, it is clear that the appellant had changed th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... supra) it was held that repacking followed by affixing MRP stickers on the packages would amount to manufacture. The appellant s reliance on the Nizam Sugar Factory case for not invoking the extended period of time does not apply to the facts of the present case. In that case it was held that while issuing the second and third show-cause notices on same or similar facts, suppression of facts on the part of assessee cannot be alleged as the facts were already in the knowledge of the authorities. In the instant case the issue involved is alteration of MRP. It is not the case of the assessee that when they changed the MRP and affixed new stickers indicating the higher MRP, they had intimated the same to the department. In fact it is not on record that they did not follow any procedure. Only after conducting the search operations, the department came to know that the assessee has been changing MRP and charging higher MRP. Therefore, the ratio of the said case does not apply to the facts of the present case. Coming to the reliance on the Hyderabad Polymers (P) Ltd. case the issue related to when an earlier show-cause notice raising the demand on a similar issue and for an identical amo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s issue and to requantify the duty, in case the appellants are found eligible for the benefit of CENVAT credit of the duty/tax paid on inputs/input services. Needless to say the appellant has to produce the necessary documentary evidence required under the CENVAT Credit Rules to prove their eligibility to the claim within a reasonable time. On such evidence being produced, the adjudicating authority shall decide the quantum of eligible credit and requantify the duty demand and the interest liability. Therefore, the matter is remanded back to the adjudicating authority to give a reasonable opportunity to the appellants to prove their claim regarding eligibility their CENVAT credit relating to duty/tax paid on input/input services and thereafter requantify the duty liability. Consequent upon such redetermination, the same may have an impact on the quantum of fine and penalties adjudged. In view of this position, the impugned order is set aside and the matter is remanded back to the adjudicating authority for fresh consideration of this issue only for the limited purpose of determination of eligibility of the appellant to Cenvat credit on inputs/input services and re-quantification of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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