TMI Blog2011 (12) TMI 436X X X X Extracts X X X X X X X X Extracts X X X X ..... leged and proved towards the assessee by independent evidence relatable to him and not on the ground that others were paying the duty. As such, I am of the view that the demand is hit by limitation as there is no evidence to the effect that the appellants knowingly indulged in non-payment of duty - Decided in favour of assessee. - Final Order No. A/2130/2011-WZB/AHD - Final Order No. A/2130/2011-WZB/AHD - Dated:- 8-12-2011 - Ms. Archana Wadhwa, Shri B.S.V. Murthy and Dr. P. Babu, JJ. Shri P.P. Jadeja, Consultant, for the Appellant. Shri R.S. Srova, JDR, for the Respondent. ORDER On the ground that the appellant is not eligible for small scale exemption, in view of the fact that the appellant was manufacturing branded mineral water having brand name Bisleri , which does not belong to them, investigation was started with the search of the factory on 20-7-2000. After investigation, issue of show-cause notice and adjudication proceedings, demand for duty of Rs. 4,70,301/- has been confirmed and penalty of Rs. 25,000/- has been imposed on the appellant under Section 11AC of the Central Excise Act, 1944. 2. The learned Consultant on behalf of the appellant submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Appeal and submits that all the submissions made by the learned Consultant have been considered by the learned Commissioner (Appeals) and the issue has been discussed in detail and he reiterates the observations made by the learned Commissioner (Appeals) in her order. 4. We have carefully considered the submissions made by both sides and also have considered the documents and records of the case. We are unable to accept the contention that the appellant was only a job worker and, therefore, they were not liable to pay duty at all. In this case, the appellants have manufactured mineral water, an item which is clearly specified in the Tariff under Heading No. 2201.19. The activity of producing processed water and filling the water in the bottle brings into existence the packaged mineral water and, therefore, the activity amounts to manufacture. Further, the goods manufactured by the appellants is one of the specified commodities and on which levy of duty is on the basis of MRP and an abatement of 50% of MRP is permitted. Just because the raw materials were supplied by M/s. GB and goods were sent under challans does not mean that the appellants cannot be treated as manufacturers. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellant on 11-9-2000 requiring the appellants to carry out filling and sealing of containers with water at the agreed rates, quality standards and delivery terms. For the said purpose, the raw materials like pet bottles, Bisleri caps and packing materials were being sent to the appellants by M/s. Gujarat Beverages under challans and the bottles filled with water being returned to M/s. Gujarat Beverages under challans. 9. As per the appellants, the bottles were not being affixed with any brand name Bisleri, inasmuch as the pet bottles and Bisleri caps were being provided by M/s. Gujarat Beverages. The said items were already affixed with the brand name Bisleri. Further, the filled bottles were being returned to M/s. Gujarat Beverages, who were affixing the labels on such filled and sealed packaged containers. It is only after the labels were affixed on the mineral water bottles, they were completely manufactured. They have argued that such affixing of labels on the bottles, under the Weight and Measurement Act and Packaged Commodity Rules, was a mandatory requirement and the goods cannot be marketed to the ultimate consumer unless such labels stand affixed on the said bottl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Para 3 of Commissioner (Appeals) that the appellant was doing job work out of the raw material supplied by M/s. Gujarat Beverages Pvt. Limited to them. The packing material as also Bisleri cap, empty bottles, printed pouches, corrugated boxes manufactured by others were being supplied to the appellant by the supplier M/s. Gujarat Beverages. There is no dispute on the above facts. It is also not disputed that appellants have only carried out the work of Filling and Sealing the bottles provided by M/s. Gujarat Beverages. As such, the Tribunal judgment in the case of Heinz India Pvt. Limited v. CCE, Faridabad - 2005 (183) E.L.T. 181 (Tri.-Delhi.), laying down that blending and packing food products for the principal out the raw material and packing material supplied by the principal on job work basis is in the nature of hired labour and the principal manufacturer being the actual manufacturer of the goods, is liable to pay the duty, demand of duty from the job worker was not warranted, is applicable. 14. It is also noted that the appellants were not affixing the bottles with brand name, either on the cap or on the bottles. Such branded caps and bottles were being provided by M/s. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -statement with an intent to evade payment of duty has to be alleged and proved towards the assessee by independent evidence relatable to him and not on the ground that others were paying the duty. As such, I am of the view that the demand is hit by limitation as there is no evidence to the effect that the appellants knowingly indulged in non-payment of duty. 17. Though I have held in favour of the appellant on merit as also on limitation, I would like to deal with the other alternative plea raised by the appellant before Commissioner (Appeals). The appellants have submitted that in any case, they should be allowed the benefit of Modvat credit on the inputs contained in the finished goods so as to neutralize the duty now being demanded against them. The said plea of the appellants stands rejected on the ground that the same was not raised before the adjudicating authority and as such, cannot be allowed. He has also observed that as the appellants have not produced any documentary evidence, the same cannot be entertained. The above plea being a legal plea, should have been allowed by Commissioner (Appeals) even though the same was not specifically raised before the adjudicating ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ain contention of the appellant was that the duty could not have been confirmed against them who had done job work for filling and sealing containers with water which were in the condition of semi-finished goods. They have not manufactured any product and therefore no duty was payable. The Order-in-Appeal has not correctly appreciated the definition of manufacture as per the Act they have carried out the only filling work for M/s. Gujarat Beverages on agreed rate of received packing materials etc. under challan and returned filled containers raising bills for job charges only. They submitted that the processed goods on job work basis would not attract duty unless it is established that the goods in question is marketable or capable of being marketed. The appellants also argued that the demand was clearly time-barred as they had not acted in any manner with any mala fide intention to evade payment of duty. The points of difference of opinion referred to me are as follows : (i) Whether the appellant has to be held as manufacturer of the Bisleri Mineral Water, so as to confirm duty against them. (ii) Whether the appellant has to be held affixing the brand name Bisleri on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... affixing of label on the goods to make them marketable also amounts to manufacture in terms of chapter note under chapter 22. As such, the job work of filling and sealing containers with water, were in a condition of semi-finished goods and the appellants cannot be said to have manufactured the product, which were complete and marketable. I agree with the Member (Judicial) s finding that as such the product having emerged as a semi-finished goods cannot be held to be an excisable commodity so as to attract any duty of excise. They cannot be said to be hit by paras 4 and 5 of Notification No. 88/99, dated 1-3-1999. 22. On the question of limitation, Member (Judicial) has held that she is not agreeing with the reasoning adopted by the appellate authority merely because the assessee did not approach the Revenue by itself. The Revenue has to allege and prove that there was positive suppression and mis-statement on the part of the assessee with an intention to evade payment of dues. It was her finding that the demand is hit by limitation. There is no evidence to the effect that the appellants knowingly indulge in non-payment of duty. 23. The plea of the appellant that they sho ..... X X X X Extracts X X X X X X X X Extracts X X X X
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