9911796707
TMI Blog2015 (2) TMI 833X X X X Extracts X X X X X X X X Extracts X X X X ..... duty and claiming rebate of duty paid on the exported goods. The appellant was also availing CENVAT Credit of duty paid on these goods at the time of clearance from Jammu. The appellant is also importing Coco Butter and Coco Powder from China and Malaysia and receives the same in their factory at Taloja. The contention of the appellant was that after receiving the import goods, they remove the old carton and repacked in a new carton by putting label thereon. The factory of the appellant was visited and found that the appellant is only putting labels on the goods procured from Jammu as well as on the imported goods. As the labels were already fixed on the boxes therefore additional labels affixed by the appellant does not amounts to manufacture as affixing of additional label does not enhance the marketability (as the goods are already marketable). Therefore, impugned proceedings were initiated against the appellant to deny the CENVAT Credit taken by them and consequently denying the rebate claim sanctioned to the appellant along with interest and penalty. The adjudicating authority confirmed the demand as stated in para 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce the marketability of the product in that case, the activity does not amounts to manufacture. Consequently, the appellant is not entitled to take CENVAT Credit. 5.2 On limitation, he submitted that in their registration, the appellant has mentioned the description of each class of goods manufactured as Coco Butter and Coco Powder and the process is to be carried out was 6. Considered their submissions in detail. 7. The facts of this case which are not in dispute are as follows. 8. The appellant is having their factory at Taloja and are also having another Unit at Jammu. The Jammu Unit is clearing the goods to Taloja unit on payment of duty and claiming the benefit of Notification No. 56/2002-CE (NT) dated 14.11..2002. As per the said Notification, whatever duty paid by the Jammu Unit is entitled for refund to the Jammu Unit and Taloja Unit is also entitled to take CENVAT Credit of the duty paid by the Jammu Unit. It is an admitted fact that after receiving the goods at Taloja Unit, the appellant is affixing two labels on the packages on two di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In relation to products of this Chapter, (On reading the said provisions, we are of the view that the following process have deemed to be amounting to manufacture:- (a) Labelling or re-labelling of containers; or (b) repacking from bulk packs to retail packs; or (c) An adoption of any other treatment to render the product marketable to the consumer. From the above, it is clear that the activity of 5. Thereafter, the definition of deemed manufacture has been changed as under:- (a) Labelling or re-labelling of containers, or (b) Repacking from bulk packs to retail packs, or (c) An adoption of any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... date CENVAT Credit is wrongly utilized. In our considered opinion, the High Court misread and misinterpreted the aforesaid Rule 14 and wrongly read it down without properly appreciating the scope and limitation thereof. A statutory provision is generally read down in order to save the said provision from being declared unconstitutional or illegal. Rule 14 specifically provides that where CENVAT Credit has been taken or utilized wrongly or has been erroneously refunded, the same along with interest would be recovered from the manufacturer or the provider of the output service. The issue is as to whether the aforesaid word OR appearing in Rule 14, twice, could be read as AND by way of reading it down as has been done by the High Court. If the aforesaid provision is read as a whole we find no reason to read the word OR in between the expressions taken or utilized wrongly or has been erroneously refunded as the word AND. On the happening of any of the three aforesaid circumstances such credit becomes recoverable along with interest. Therefore, the word AND cannot be substituted for OR. If we read the definition in the present form ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... although this activity does not enhance the marketability of the product.
8.11 On limitation, we find that the activity of affixing the additional label and availlment of CENVAT Credit was known to the department during the impugned period as the appellant were filing their returns regularly and obtained registration for the activity of affixing label on the packages. Further, the issue in question is that whether the labeling/relabelling amount to manufacture or not as per Note 3 to Chapter.18 of CETA although the goods are already marketable needs interpretation of statute. Therefore, the demand for extended period of limitation is also not sustainable.
8.12 From the above discussion, we hold that the activity of 5. With these observations, the impugned demands are not sustainable accordingly, the impugned order is set aside and the appeal is allowed with consequential relief, if any.
(Pronounced in Court on 05.01.2015) X X X X Extracts X X X X X X X X Extracts X X X X
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