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2020 (3) TMI 456 - HC - Central ExciseMaintainability of appeal - appropriate forum - CENVAT credit - activity amounting to manufacture or not - activity of re-packing which is not packing in unit containers - activity of re-labeling with the name and without any hologram or marking while the re-labeling being done only for the logistics purpose by the assessee - treatment to the already marketable products by the assessee would amount to manufacture - filing of a Return under Rule 12 of Central Excise Rules, 2002 - disclosure of full details. Whether the present appeals which raises a question of excisability itself or not, will be appealable before the Hon'ble Supreme Court or not? HELD THAT - The question whether the activity carried out by the Assessee amounts to deemed manufacture or not is the basic question involved in the present appeals. While the Tribunal decided in favour of Assessee that the activity amounts to 'manufacture', the Revenue seeks to raise a question and doubt it on that ground that the Assessee only carried out some kind of packing/ repacking or labelling of goods not amounting to the process of 'manufacture' - It is quite obvious that clause (iii) was inserted in the definition of manufacture in Section 2(f) of the Act by Finance Act, 2003 with effect from 01.03.2003 which clearly by a deeming fiction included in III Schedule the activities which only involves packing or repacking of such goods in a unit container or labelling or re-labelling of containers etc. In view of such extended definition now incorporated in the Statute itself, we do not find any justification for the Revenue to raise a question on this as to whether the activity carried out by the Assessee will amount to manufacture or not. Since the question of excisability under Central Excise Act and dutiability under the Customs Act are the basic questions at the root of the matter, before deciding the questions of rate of duty and valuation of goods, which as per expanded scope of 35L of the Act, should naturally now lie before the Hon'ble Supreme Court of India. Even before the said amendment in law took place, the Division Bench of Karnataka High Court in two decisions dealing with both the enactments viz., Excise Law and Customs Law made such observations and held that such appeals are maintainable before the Hon'ble Supreme Court of India - Reliance can be placed in the case of CCE., MANGALORE VERSUS MANGALORE REFINERIES PETROCHEMICALS LTD. 2010 (9) TMI 756 - KARNATAKA HIGH COURT . In view of the amendment in the provisions of Section 35 L(2) akin to Section 130 of the Customs Act, we are of the clear opinion that the issues raised in the present Appeals are governed by the domain jurisdiction of Hon'ble Supreme Court of India and the present Appeals filed by Revenue, cannot be maintained before this Court. The appeals filed are therefore not maintainable and is dismissed.
Issues Involved:
1. Legality of availment of CENVAT credit under Rule 3 of CENVAT Credit Rules, 2004. 2. Whether the activity of re-packing by the assessee amounts to manufacture under Section 2(f)(iii) of the Central Excise Act, 1944. 3. Whether the activity of re-labeling for logistics purposes amounts to manufacture under Section 2(f)(iii) of the Central Excise Act, 1944. 4. Whether treatment to already marketable products by the assessee amounts to manufacture under Section 2(f)(iii) of the Central Excise Act, 1944. 5. Applicability of extended period of limitation under Rule 12 of Central Excise Rules, 2002. Issue-wise Detailed Analysis: 1. Legality of availment of CENVAT credit under Rule 3 of CENVAT Credit Rules, 2004: The Revenue Department raised the question of whether the assessee's activity qualifies as "manufacture" under Section 2(f)(iii) of the Central Excise Act, 1944, which is essential for the availment of CENVAT credit. The Tribunal found that the activities undertaken by the assessee, including packing and labeling, satisfied the definition of "deemed manufacture" under Section 2(f)(iii). The Tribunal's decision was based on a detailed examination of the processes involved, concluding that these activities rendered the products marketable to the consumer, thus justifying the availment of CENVAT credit. 2. Whether the activity of re-packing by the assessee amounts to manufacture under Section 2(f)(iii) of the Central Excise Act, 1944: The Tribunal determined that the re-packing activities undertaken by the assessee fell under the definition of "manufacture" as per Section 2(f)(iii). The Tribunal's analysis included a step-by-step description of the re-packing process, which involved multiple stages of handling, labeling, and preparing the goods for market. The Tribunal concluded that these activities constituted "deemed manufacture," thereby affirming the assessee's right to avail CENVAT credit. 3. Whether the activity of re-labeling for logistics purposes amounts to manufacture under Section 2(f)(iii) of the Central Excise Act, 1944: The Tribunal found that the re-labeling activities, even if performed for logistics purposes, met the criteria for "manufacture" under Section 2(f)(iii). The Tribunal rejected the Revenue's argument that labeling for logistics did not amount to manufacture, emphasizing that the statutory definition included such activities. The Tribunal held that the labeling process contributed to making the goods marketable, thereby qualifying as "deemed manufacture." 4. Whether treatment to already marketable products by the assessee amounts to manufacture under Section 2(f)(iii) of the Central Excise Act, 1944: The Tribunal ruled that any treatment applied to already marketable products, which involved packing, re-packing, or labeling, constituted "deemed manufacture" under Section 2(f)(iii). The Tribunal's decision was based on the comprehensive definition provided in the statute, which included various processes that rendered the product marketable to the consumer. 5. Applicability of extended period of limitation under Rule 12 of Central Excise Rules, 2002: The Tribunal did not directly address the extended period of limitation in its order. However, the High Court noted that such issues fall within the jurisdiction of the Hon'ble Supreme Court under Section 35L of the Central Excise Act, 1944, as they pertain to the determination of excisability and taxability, which are foundational questions before addressing the rate of duty or valuation. Jurisdictional Analysis: The High Court upheld the preliminary objection raised by the respondent/assessee regarding the maintainability of the appeals under Section 35G of the Central Excise Act, 1944. The Court emphasized that questions related to the excisability and taxability of goods fall within the jurisdiction of the Hon'ble Supreme Court under Section 35L, particularly after the amendment introduced by the Finance Act, 2014. The Court cited multiple judgments to support this view, including decisions from the Karnataka High Court and previous rulings of the Madras High Court. The Court concluded that the present appeals raised fundamental questions of excisability, which should be addressed by the Supreme Court, not the High Court. Conclusion: The High Court dismissed the appeals filed by the Revenue as not maintainable, directing that such questions of law should be raised before the Hon'ble Supreme Court of India. The Court provided a detailed analysis of the jurisdictional boundaries between the High Court and the Supreme Court, emphasizing the exclusive domain of the Supreme Court in matters involving the determination of excisability and taxability under the Central Excise Act, 1944.
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