2012 (5) TMI 358 - AT - Customs

Affixing of MRP on imported goods - sale to institutional consumers - Valuation for the purpose of levy of CVD - Manufacture - meaning to the definition of manufacturer given under Rule 2(h) Held that - appellant has given a distorted meaning to the definition of manufacturer given under Rule 2(h) - There is nothing in the definition of manufacturer to show that mere affixture of trade mark would suffice the requirement of the inclusive definition. - Decided against the assessee.

Summary

Issues:
- Interpretation of the definition of 'manufacturer' under Rule 2(h) of the Standards of Weights and Measures (Packaged Commodities) Rules, 1977.
- Whether the importer can be considered a manufacturer based on the definition provided.
- Requirement of clear markings on goods to be considered as manufactured by the importer.
- Applicability of the definition of 'manufacturer' in determining valuation for Central Value Duty (CVD) purposes.

Analysis:

The appeal before the Appellate Tribunal CESTAT, Mumbai involved a dispute regarding the classification of the importer as a 'manufacturer' under Rule 2(h) of the Standards of Weights and Measures (Packaged Commodities) Rules, 1977. The Tribunal noted that in a previous round, the matter was remanded to the adjudicating authority to consider the plea of the assessee that they should be treated as manufacturers based on the mentioned Rules. The adjudicating authority, after hearing the assessee, held that the importer could not be considered a manufacturer primarily because the goods lacked any marking indicating production by the assessee, as required by the definition of 'manufacturer' under Rule 2(h.

Despite the absence of representation from the appellant during the hearing, the Tribunal considered the written submissions filed by the counsel. The appellant argued that they should be classified as manufacturers under Rule 2(h) as they comply with Rule 2A when selling directly to institutional consumers, thereby exempting them from affixing Maximum Retail Price (MRP) on their products. The Tribunal, however, examined the submissions and found that the appellant had misinterpreted the definition of 'manufacturer' under Rule 2(h) by suggesting that the mere affixture of their trademark on the goods would suffice the requirement of being classified as a manufacturer.

The Tribunal emphasized that the definition of 'manufacturer' should be strictly construed, requiring clear markings on the goods indicating production by the assessee to fall within its ambit. Since the imported goods did not bear such markings, the Tribunal upheld the adjudicating authority's decision that the appellant could not be considered a manufacturer. The Tribunal rejected the appellant's argument that the affixture of their trademark alone was adequate to meet the definition requirements, stating that substantive statutory provisions must be strictly interpreted. Consequently, the Tribunal upheld the impugned order and dismissed the appeal, affirming the decision that the importer could not be classified as a manufacturer under Rule 2(h) of the Rules.