2014 (6) TMI 581 - AT - Central Excise

Waiver of pre-deposit of duty - Affixing of retail price on goods - cosmetic products - Revenue contends that applicants are affixing retail sale price on the goods imported which amounts to manufacture therefore the appellants are liable to pay Central Excise duty. - Held that - There is no evidence on record to show that applicants undertaking any activity which amounts to manufacture as applicants were not labelling or relabelling of packages nor affixing any retail sale price after the clearance from the customs. The retail sale price is affixed before the clearance of the goods from the customs area as per the requirement by the Notification No. 44(RE-2000)/1997-2002, dated 24-11-2000 and paid the CVD duty as per the retail price fixed on the goods. In view of this, we find that the applicants had made out a strong case in their favour. The pre-deposit of dues are waived and recovery of the same is stayed during the pendency of the appeal - Stay granted.

Summary

Issues:
Waiver of pre-deposit of duty, interest, and penalty on imported cosmetic products under Central Excise Act.

Analysis:
The applicant sought waiver of pre-deposit of duty, interest, and penalty amounting to Rs. 58,34,11,854/- related to the import of cosmetic products. The Revenue contended that affixing retail sale price on the imported goods constitutes "manufacture" under the Central Excise Act, making the appellants liable to pay Central Excise duty. However, the applicant argued that they affixed the retail sale price before customs clearance in compliance with Notification No. 44 (RE-2000)/1997-2002, which mandates pre-packaged commodities to carry maximum retail sale price before import. The applicant claimed that no further processes were undertaken post-customs clearance, refuting the Revenue's demand for duty payment.

The Revenue relied on a Tribunal decision to support their stance that altering retail sale price post-customs clearance amounts to manufacture. Nevertheless, the Tribunal noted the absence of evidence showing any manufacturing activity post-customs clearance by the applicants. It was established that the retail sale price was affixed before customs clearance as required by the notification, and the appropriate Countervailing Duty (CVD) was paid accordingly. Consequently, the Tribunal found in favor of the applicants, granting waiver of pre-deposit and staying the recovery of dues during the appeal's pendency.

In conclusion, the Tribunal ruled in favor of the applicant, observing that no manufacturing activities were conducted post-customs clearance, and the retail sale price was affixed in compliance with the relevant notification. As a result, the pre-deposit of dues was waived, and recovery of the same was stayed. The stay petitions were allowed, providing relief to the applicant in the matter concerning Central Excise duty on imported cosmetic products.