TMI Blog2017 (3) TMI 1439X X X X Extracts X X X X X X X X Extracts X X X X ..... r the process of labelling, packing undertaken by the appellant (M/s GTM/Global) will amount to manufacture or not? - Held that: - labelling of the products, packing from bulk cartons to combo boxes (with one oil and one shampoo container) and making them ready for retail market is carried out by M/s GTM/Global, in their premises. The cartons with 200 bottles received by GTM/Global are meant for inter-unit transfer in bulk and not for retail consumer. Such bulk consignments are made in to retail packs (combo packs with bottle of oil and powder) in a single retail carton box. This carton box is fit for retail sale undertaken by GTM/Global. Applying the provisions of Note 6 of Chapter 30, we find that the processes undertaken by the appellant will amount to manufacture attracting Central Excise levy. Personal Penalty on Shri Anuj Agarwal is Director of the appellant (GTM) - Held that: - The duty liability in this case arises, even after such classification, in view of deemed manufacture in terms of Chapter Note 6. In such situation alleging malafide intend to violate the provisions of central excise law against an individual, as officer of the appellant company, is not tenable. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cision. 3. The impugned original order by learned Commissioner held that the product Keshyog Ayurvedic/Herbal Hair Oil and Keshyog Ayurvedic Shampoo are to be classified under CETH 3305 as preparations for use on the hair and not as Ayurvedic medicine under Chapter 30. It was further held that the activity of labelling or re-labelling of these products and making them marketable in combi-pack as Keshyog Herbal Hair Treatment , amounts to manufacture in terms of Note 5 of Chapter 33. The Original Authority confirmed Central Excise duty of ₹ 1,36,72,354/- from M/s GTP Teleshopping Pvt. Ltd./ M/s Global Tele Mall. Equal amount of penalty was also imposed on these appellants; ₹ 17,83,745/- was confirmed as duty from M/s Gurukripa Consumer Care Products; equal amount of penalty was also imposed on them; penalties were imposed on Shri Anuj Agarwal, Director (Rs.15 lakhs), Shri Gurucharan Patidar (Rs.10 lakhs) and Shri Pranayadutta Shukla, Proprietor (Rs.10 lakhs) under Rule 26 of Central Excise Rules, 2002. Appeal Nos. E/2111 /2012 and E/2113/2012 are against classification and confirmation of duty demand alongwith imposition of penalties filed by GTM Teleshopping Pvt. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n various decisions of the Tribunal and higher courts in support of his contention. Reference is made to these decisions later in this order. 5. Regarding the process undertaken by the appellants, amounting to manufacture or not, it is submitted that the appellants received packed and sealed bottles of hair oil/shampoo powder. One bottle each of the oil and powder is packed together in a combi pack in a box which is printed with brand name, details are ingredients, batch number, manufacturing date, MRP etc. The activity on the part of the appellant is only of labelling and packing. The learned Counsel submitted that this activity alone will not amount to manufacture. Note 6 of Chapter 30 has no application to the process undertaken by the appellant as they are not converting bulk pack to retail pack. As such, they are not liable to any Central Excise duty on this ground. 6. The learned Counsel for Shri Pranayadutta Shukla submitted that the Tribunal vide final order dated 15/02/2012 set aside the original order dated 25/11/2009 and remanded the matter back to the Original Authority. However, in the present denovo order, the Commissioner held that order dated 25/11/2009 is sti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Keshyog Herbal Hair Treatment . The plastic containers which contained the shampoo powder and hair oil identify them as an Ayurvedic medicine. In this connection, the nature of the product and how it is marketed can be ascertained from the packing carton used for combo pack. The same is reproduced below :- The brochure inside the combo pack contains the following table:- Your Hair status Frequency of use Minimum Application Required Precautions Bald/Near baldness Daily 5 times a weet Do not use any other harl product during treatment, Avoid distract Sunlight and use cap. Hair Fall Daily 4 times a weet Do not use any other harl product during treatment Do not comb with sharp/dense brush. Dandruff Once every 3 Days Twice a weet Do not use anti dandruff Chemical Shampoo. Do not scratch the scalp, Shleld your hair from Pollution. Activity like highlighting/Dyeing/Coloring/Streaks ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ells is secondary to what is sold and what is bought. Many non-prescription drugs are sold from places other than pharmacies. That would not make all those non-prescription drugs anything other than what they are. Who sells depends upon what are the requirements under the relevant licensing law and that cannot be determinative of what is sold. 6. Much case law has been cited by both sides. But that only shows that classification of each product is required to be determined based on its facts and that there is no single rule applying into all products. We find that the judgments in B.P.L Pharmaceuticals Ltd. v. Collector of Central Excise. Vadodara, 1995 (77) E.L.T. 485 (S.C.), Himtaj Ayurvedic Udyog Kendra v. Commissioner of Central Excise, Allahabad, 2002 (139) E.L.T. 610 (Tri. - LB) and Commissioner of Central Excise v. Sharma Chemical Works, 2003 (154) E.L.T. 328 (S.C.) = 2003 (56) RLT 123 (S.C.), CA Nos. 283-284, 2640/2001 and 707-709 of 2003, dated 30 th day of April, 2003 , particularly apt to the present case. In the BPL Pharmaceutical case, the issue involved was the classification of Selsun an anti-dandruff preparation containing 2.5% selenium sulphide. Havi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccept the contention of the appellant to the effect that processes in the said note are not undertaken by them. The facts of the case are that M/s Gurukripa Consumer Care Products manufactured these items and packed them in plastic containers of 120 ml and 60 gms. The shampoo bottle was printed with text TM Keshyog Herbal Powder Shampoo . The bottles of hair oil and shampoo powder were dispatched in separate corrugated boxes, normally containing 200 numbers of bottles of hair oil, 200 bottles of shampoo, respectively. Thereafter these products are put in combo box containing one bottle of hair oil and one bottle of shampoo powder alongwith product brochure. The labels for the containers were also affixed (by GTM/Global) in their premises. Thus, it is clear that labelling of the products, packing from bulk cartons to combo boxes (with one oil and one shampoo container) and making them ready for retail market is carried out by M/s GTM/Global, in their premises. The cartons with 200 bottles received by GTM/Global are meant for inter-unit transfer in bulk and not for retail consumer. Such bulk consignments are made in to retail packs (combo packs with bottle of oil and powder) in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rector of the appellant (GTM). The brand name belongs to the said appellant and they have made arrangement for manufacture and supply of these items and undertaken the labelling and re-packing before marketing. Regarding penalty imposed on Shri Anuj Agarwal, Director of GTM we note that provisions of Rule 26 have been invoked by Original Authority. The classification of the product as ayurvedic medicines, as claimed by appellants, has been upheld by us. The duty liability in this case arises, even after such classification, in view of deemed manufacture in terms of Chapter Note 6. In such situation alleging malafide intend to violate the provisions of central excise law against an individual, as officer of the appellant company, is not tenable. The original order did not elaborate and justify the penalty imposed on individuals. It was simply recorded that as the goods were found to be liable for confiscation under Rule 25, the penalty on the Director, under Rule 26 was justified. We find such reasoning is not sufficient. Accordingly, the personal penalty imposed on Shri Anuj Agarwal is set aside. 16. The Original Authority did not separately discuss and justify the reasons for i ..... 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