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Keva Fragrances Pvt. Ltd. Versus Commissioner of C. Ex., Mumbai-III

2016 (1) TMI 477 - CESTAT MUMBAI

100% EOU - scope of the term 'manufacture' as per EXIM - demand of excise duty on the indigenously procured goods and custom duty on the imported goods on the ground that goods procured indigenously and imported were exported as such and was not used in the manufacture - Notification No. 52/2003-Cus., dated 31-3-2003 and Central Excise Notification No. 22/2003-C.E - The appellant time and again made categorical submission that goods indigenously procured and imported were exported after re-packi .....

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and labelling/re-labelling as claimed and submitted by the appellant, then it cannot be said that the goods exported by the appellant is without carrying out manufacture activity.

Commissioner have not given any emphasized on the aspect of re-packing and labelling/re-labelling as manufacture. The Commissioner has also not discussed in his order whether the re-packing and labeling has taken place and in what manner. - Commissioner has not dealt with submission the made by the appella .....

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ner of Central Excise, Mumbai-II. 2. The fact of the case is that the appellant M/s. Keva Fragrances Pvt. Ltd. (KFPL) is 100% export oriented unit engaged in the manufacture of Perfumes and fragrances falling under CETH 330290. The appellant have been issued the show cause notice under F. No. V.Adj(SCN)15-49/Commr/MDN/M-III/2010, dated 9th May, 2012 proposing denial of Notification No. 22/2003-C.E., dated 31-3-2003 and Notification No. 52/2003-Cus., dated 21-3-2003 and consequently proposed .....

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natural oils procured either locally or imported. These compounds are exported directly and sometimes through third parties. These compounds are manufactured under Bond under a license issued under Sections 58 and 65 of the Customs Act, 1962 by the Asstt. Commissioner of Customs (EOU section), New Customs House, Mumbai. They procure the inputs against a procurement certificate or CT 3 obtained from the jurisdictional Range officer. The Inputs are procured without payment of either Customs Duty o .....

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d 31-3-2003. On the scrutiny of the Export register, Bond register, the Manufacturing Register revealed that appellant had procured various raw material required for their manufacturing activities under the cover of Procurement Certificate (for imported goods) and CT-3 certificate (for indigenous goods) in terms of Notification No. 52/2003-Cus., dated 31-3-2003 and Central Excise Notification No. 22/2003-C.E., dated 31-3-2003 respectively. The manufacturing register however shows the part of the .....

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tter 15 Sep, 2010 are not manufactured by them. It is contended in the show cause notice that it appears from the letter dated 1-10-2010 to the appellant and their reply dated 27-10-2010 thereto, that the approval accorded to them by Dy. Commissioner, SEEPZ for broad banding of items of manufacture is namely perfumery compound allowed in terms of LOI No. 783(81), dated 30-12-1981 as amended, whereas the goods exported (as per Annexure A to SCN) are those goods which are inputs procured duty free .....

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carry out the manufacture, production, packaging or job work or Service in Customs Bond; (ii) Notfn. No. 22/2003-C.E. stipulates that all raw materials, when brought in connection with, manufacture and packaging of articles of for production, into an EOU, from the whole of duty of excise and the additional duty of excise, subject to the condition that the same are used for the specified purpose, i.e., for manufacture, production, packaging, job work for export of goods or service; (iii) Chapter .....

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r exported. (v) Para 2 of Board s Circular No. 91/2002-Cus., dated 20-12-2002 allows sale of unutilized material to DTA unit or to another EOU only in exceptional cases and cannot be a regular feature for the units. In nutshell, show cause notice contended that the Notification No. 52/2003-Cus., dated 31-3-2003 and Central Excise Notification No. 22/2003-C.E., dated 31-3-2003 shown to be applicable only if the goods imported under the said notification has been used in the manufacture of goods w .....

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before us. 3. Shri Yogesh Patki, ld. Counsel for the appellant submits that entire demand was confirmed only on the ground that the appellant have not manufactured the goods exported from the raw material imported under Notification No. 52/2003-Cus., dated 31-3-2003 and indigenously procured under Notification No. 22/2003-C.E., dated 31-3-2003 therefore, the vital condition has been violated consequently notifications were denied and customs duty and excise duty was confirmed. He submits th .....

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and re-labelling, etc. Therefore, in the case of 100% EOU which is governed by the EXIM Policy, definition of manufacture provided under the EXIM Policy shall be adopted and not manufacture as provided under Section 2(f) of Central Excise Act, 1944. Therefore, the charges of the show cause notice become Null and void, once it is accepted that the appellant have carried out the activity of repacking and re-labelling which amount to manufacture and since the said activity amounts to manufacture, .....

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and the appellant is otherwise entitled for draw back of the same duty which is payable. 4. On the other hand, Shri Rakesh Goyal, ld. Addl. Commissioner (AR) appearing on behalf of the Revenue reiterates the findings of the impugned order. He submits that since, re-packing/labelling alone is not amount to manufacture, the appellant have exported the goods without carrying out any manufacturing activity, hence violated the condition of manufacture in order to avail benefit of Notification No .....

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absence of such, vital condition of manufacture, there is violation of condition prescribed under both the notification and consequently denied both the notification; therefore, the demand confirmed by the adjudicating authority is sustainable. 5. We have carefully considered the submissions made by both sides. 6. The adjudicating authority confirmed the demand by denying the Notification No. 22/2003-C.E., dated 31-3-2003 on the indigenous procured goods and under Notification No. 52/2 .....

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as per the EXIM Policy. In this regard, we have gone through the definition of manufacture provided under the EXIM Policy, which is reproduced below : 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, repacking, polishing, labeling, reconditioning repair, remaking, refurbishing, testing, calibration, reengineering, manufactur .....

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the appellant has undergone the process of repacking and labelling/re-labelling as claimed and submitted by the appellant, then it cannot be said that the goods exported by the appellant is without carrying out manufacture activity. However, we find that the ld. Commissioner have not given any emphasized on the aspect of re-packing and labelling/re-labelling as manufacture. The Commissioner has also not discussed in his order whether the re-packing and labeling has taken place and in what manne .....

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