2023 (12) TMI 998 - AT - Central Excise

Exemption from payment of duty under N/N. 22/2003 dated 31.03.2003 - goods cleared to 100% EOU - inputs cleared as such - period June 2010 to September 2010 - HELD THAT - For a different period, the Tribunal in M/s. Ajinomoto India Pvt. Ltd. Versus CCE, Chennai-IV 2018 (7) TMI 85 - CESTAT CHENNAI had remanded the matter to verify whether any consignment was cleared as such by the appellant. On perusal of the records, there are no sufficient clarity as to whether the procured goods entirely have been re-packed and re-labelled. Needless to say in the said activities are carried out then it amounts to manufacture. The Ld. Counsel has submitted that they would be able to furnish documents to establish their contention with regard to re-packing and re-labelling of the goods. As the issue in the appellant s own case has been considered favourably by the authorities below for several consignments, the matter requires to be remanded to the adjudicating authority who is directed to consider the contention of the appellant that their activity amounts to manufacture and verify the same. The impugned order is set aside - the appeal is allowed by way of remand.

Summary

Issues:
The issues involved in the judgment are whether the appellant is eligible for exemption from payment of duty when clearing goods to 100% EOUs, and whether the activity of repacking and re-labeling amounts to "manufacture" under the Central Excise Act, 1944.

Exemption Eligibility Issue:
The appellant held Central Excise Registration for manufacturing Mono-sodium Glutamate (MSG) and availed CENVAT Credit on inputs. The Department contended that to be eligible for duty exemption when clearing goods to 100% EOUs, inputs should be used to manufacture finished goods at the factory. A Show Cause Notice was issued for duty demand on inputs cleared to EOUs. The original authority confirmed duty demand, which was upheld by the Commissioner (Appeals). The appellant argued that repacking and re-labeling constitute manufacture, citing a previous favorable decision. The Tribunal remanded the matter to verify if goods were cleared as such and directed consideration of the manufacturing contention.

Manufacture Activity Issue:
The appellant claimed that re-packing and re-labelling the inputs before clearing to EOUs amounts to "manufacture." The Department argued that the appellant cleared inputs as such, making them ineligible for duty exemption. The Tribunal noted inconsistencies in the appellant's activities and remanded the matter for verification and consideration of the manufacturing claim. The impugned order was set aside, and the appeal was allowed by way of remand for further adjudication based on the manufacturing contention and previous favorable decisions.

Separate Judgment:
The judgment was delivered by Hon'ble Mrs. Sulekha Beevi C.S., Member (Judicial), and Hon'ble Mr. Vasa Seshagiri Rao, Member (Technical).