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2009 (9) TMI 55 - AAR - Central ExciseManufacture Sale of packed goods Proactiv Solution Revitalizing Toner, Proactiv Solution Renewing Cleanser, Proactiv Solution Repairing Lotion and Proactiv Solution Refining Mask - Held that labeling at the port of import itself can not be amount to manufacture goods falling under heading 3003, 3004, 3303, 3304 or 3305 conversion of powder into tablets or capsules, labelling or re-labelling of containers intended for consumers or re-packing from bulk packs to retail packs or adoption of any other treatment to render the product marketable to the consumer would be construed as manufacture - Since the activity of putting the individual products into kits, packaging and labeling of the kits has been held to amount to manufacture, the process of preparation of such kits is excisable and the kits are liable to excise duty under Section 3 of the Central Excise Act, 1944 Crevat Credit is available.
Issues Involved:
1. Classification of individual products under the Central Excise Tariff. 2. Excisability of kits and their classification. 3. Method of valuation of the kits. 4. Eligibility for credit of duty paid on imported and indigenous inputs, capital goods, and service tax for final products. Analysis: 1. The applicant intended to manufacture skin care products in India by importing four products under the brand name "Proactiv Solution." The products were to be sold individually and in kits. The individual products were classified under the Central Excise Tariff as per Ruling No AAR/Cus/03/2009. The classification was specified for each product based on their nature and usage. 2. The excisability of the kits and their classification was determined based on the process of labeling, packing, and putting individual products into kits. The kits were classified under the Central Excise Schedule by considering the essential character of the products and their intended use. Proactiv Solution Kit-I and Kit-II were classified as medicaments under specific tariff items. 3. The method of valuation of the kits was analyzed in the context of the Drugs (Prices Control) Order, 1995. The kits were subject to excise duty based on the maximum retail price printed on them, with a specific abatement percentage applicable. The excise duty assessment for the kits was detailed, considering the relevant provisions and notifications. 4. The eligibility for credit of duty paid on imported and indigenous inputs, capital goods, and service tax for the final products was discussed. The applicant was deemed eligible to take credit of additional duties paid on inputs and capital goods, along with service tax paid on input services as per the Cenvat Credit Rules, 2004. This credit could be utilized for the payment of excise duty on the final products, namely Proactiv Solution Kit-I or Kit-II. Overall, the ruling provided a comprehensive analysis of the issues raised by the applicant regarding the classification, excisability, valuation, and credit eligibility for the imported products and kits under the Central Excise Act, 1944. The judgment clarified the legal implications of the manufacturing processes involved and the applicable duties and taxes in detail.
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