9911796707
TMI Blog2014 (12) TMI 167X X X X Extracts X X X X X X X X Extracts X X X X ..... uary, 2009 to June, 2009, CPIL were sending 100 gm. toothpaste tubes and 200 gm. toothpaste tubes manufactured by them and toothbrushes purchased from a manufacturer in Haridwar to the appellant for packing in combo pack/promo pack - each promo/combo pack having one 200 gm. toothpaste tube, one 100 gm. toothpaste tube and one toothbrush - the toothbrush was being given free by CPIL to the buyers of the promo/combo pack. The appellant, after repacking the toothpaste tubes and toothbrush into combo pack/promo pack were sending the same back to CPIL. The appellant had applied for and had been given by the Department, a service tax registration number and during the period of dispute were paying service tax on the packing charges being received by them from CPIL. CPIL who were availing full duty exemption under Notification No. 50/2003-C.E. in respect of toothpaste manufactured by them, had given the required declaration to the Department for availing of this exemption and vide letter dated 11-10-2007 addressed to AC, Shimla had also intimated that they would be making promo/combo packs of 200 gm. and 100 gm. tubes with one free toothbrush and for this purpose, the goods to be packed a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... H.P.)] set aside the Tribunal's orders dated 7-9-2011 and 11-11-2011 on the ground that another Bench of the Tribunal in case of M/s. Vasanthan Enterprises, involving an identical issue, while considering stay application, had, vide stay order dated 22-9-2011 dispensed with the condition of pre-deposit and allowed the stay petition unconditionally and as such the impugned order lacks consistency. Hon'ble High Court directed this Tribunal to consider the stay application afresh and pass fresh orders after affording an opportunity for hearing to the petitioners. In this regard, Para 12 of the order of Hon'ble High Court is as under - "12. For all the above reasons, we are of the view that the stand taken by the Tribunal while passing the impugned orders require fresh consideration. Accordingly, we set aside Annexure P-18 and P-23 and all other dependent orders. There will be a direction to the Tribunal to consider Annexure P-16, stay application referring to all relevant factors referred to above and pass fresh orders after affording an opportunity for hearing to the petitioners. The writ petition is allowed as above. Pending applications, if any, shall also stand disposed of." ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant is located, is notified under Notification No. 50/2003-C.E. and the goods being packed are also notified as goods eligible for exemption, the duty exemption under Notification No. 50/2003-C.E. cannot be denied just on the ground that declaration in terms of condition (i) of the notification was not filed, that in the circumstances of the case, the non-filing of declaration by the appellant in terms of condition (i) of the notification is not fatal, that in this regard he relies upon Tribunal's judgment in case of Vasanthan Enterprises v. CCE, Chandigarh [Stay Order No. 933/2011-EX, dated 22-9-2011] [2012 (279) E.L.T. 61 (Tri. - Del.)], Aditya Packaging v. CCE, Meerut-II [2009 (245) E.L.T. 543 (Tri.-Del.)] & M/s. Shivam Enterprises [Stay Order No. 159/2012-EX, dated 23-1-2012] [2012 (279) E.L.T. 479 (Tri. - Del.)], that in any case, since the appellant were repacking the toothpaste and toothbrush into combo pack for CPIL on job work basis, the declaration filed by CPIL has to be treated as the declaration filed by the appellant for Notification No. 50/2003-C.E., that in any case, bulk of the demand raised for period from October, 2007 to June, 2009 vide show cause notice d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... est and penalty for maintenance of this appeal in terms of provisions of Section 35F would cause "Undue hardship" and whether this case merits dispensation from the requirement of pre-deposit in terms of proviso to Section 35F, the key question which has to be decided is as to whether the appellant have prima facie case in their favour. 7. The undisputed facts in this case are that - (1) The appellant's unit is located at Khasra No. 382/62/1, Village Judikalan, Baddi, Tehsil Nalagard, Distt. Solan (H.P.) and this Khasra No. is covered by the exemption Notification No. 50/2003-C.E. and the products being packed are also covered by this notification; (2) The appellants are engaged only in repacking - i.e. packing of toothpaste tubes of 200 gm. and 100 gm. individually packed in retail packs and toothbrushes, received from CPIL's unit, also located in the area specified a Notification No. 50/2003-C.E., into a promo pack/combo pack - the carton for promo pack/combo pack with the particular of contents and MRP printed on them are also received from CPIL; (3) While the toothpaste has been manufactured by CPI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nbsp; if so, whether the duty exemption under Notification No. 50/2003-C.E. is available to the appellant; and (3) if the appellant's activity amounts to manufacture and they are not eligible for exemption under Notification No. 50/2003-C.E. and duty is recoverable from the appellant, whether the extended period under proviso to Section 11A(1) would be available and whether the appellant would be liable to penalty under Section 11AC of the Act. 9. Coming first to the question as to whether the activity of the appellant amounts to manufacture under Section 2(f)(iii) of the Central Excise Act, 1944; Section 2(f), reads as under :- "Manufacture" includes any process - (i) x x x (ii) x x x (iii) which, in relation to the goods specified in the Third Schedule, involves packing or repacking of such goods in a unit container or labelling or relabelling of container including declaration or alteration of retail sale price or adoption of any other treatment on the goods to render the product marketable to the consumer". Toothpaste and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... put in the combo pack of toothpaste, Clause (4) of the Notification cannot be applied. (2) Hon'ble Himachal Pradesh High Court in the case of Gillette India Ltd. v. Union of India reported in 2009 (235) E.L.T. 5 (H.P.) has held that clause (4) of the Notification No. 50/2003-C.E. cannot be applied to the units which had started production prior to 18-1-2008. In this case, undisputedly, the appellant clearance had started prior to 18-1-2008. 10.2 Coming to the objection (a) of the Revenue, that the appellant had not filed the required declaration in terms of conditions (i) to (iv) of the notification, the relevant portion of the notification containing the condition is reproduced below :- "Provided that the exemption contained in this notification shall apply subject to the following conditions, namely - (i) The manufacturer who intends to avail of the exemption under this notification shall exercise his option in writing before effecting the first clearance and such option shall be effective from the date of exercise of the option and shall not be withdrawn during the remaining part of the financial year; (ii) &n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emption. We find that all the information as mentioned in the condition (ii) of the notification, Khasra No. and address of the appellant, nature of their activity, etc., was contained in the letter dated 11-10-2007 and 1-11-2007 submitted by CPIL. Beside this, the appellant under impression that their activity is Business Auxiliary Service, had taken service tax registration and were paying service tax on the job charges. There is also a letter dated 28-1-2008 of CPIL to the Superintendent (Prev.), Chandigarh, seeking clarification as to whether the appellant's activity would attract excise duty to which there was no response. In this factual background, when the Department at a later date took a view that the appellant's activity amounted to manufacture, the benefit of duty exemption under Notification No. 50/2003-C.E. could not be denied just on the ground that before effecting clearances they did not file the required declaration. In the circumstances of the case, what the Department seeks is an impossibility - more so when from the facts of the case, it appears that the Department from very beginning had all the information about the location of the appellant's factory and nat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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