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TMI Blog2016 (1) TMI 477X X X X Extracts X X X X X X X X Extracts X X X X ..... ces Pvt. Ltd. (KFPL) is 100% export oriented unit engaged in the manufacture of Perfumes and fragrances falling under CETH 330290. The appellant have been issued the show cause notice under F. No. V.Adj(SCN)15-49/Commr/MDN/M-III/2010, dated 9th May, 2012 proposing denial of Notification No. 22/2003-C.E., dated 31-3-2003 and Notification No. 52/2003-Cus., dated 21-3-2003 and consequently proposed demand of Central Excise duty and Customs duty along with proposal for interest and penalty. The show cause notice contended as under : M/s. Keva Fragrances Pvt. Ltd. has been granted EOU status by the Development Commissioner and has been issued Green Card and LOI No. 783(81), dated 30-12-1981 as amended for manufacture of Perfumery Compounds and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated 31-3-2003 and Central Excise Notification No. 22/2003-C.E., dated 31-3-2003 respectively. The manufacturing register however shows the part of the goods so procured as manufactured by them but the export register shows that the raw material procured and shown as manufactured were exported as such. In order to verify whether they had manufactured the raw material shown in their manufacturing register, the appellant on enquiry vide Range office letter dated 7-9-2010 informed the percentage of utilization of the said inputs. Vide their letter No. KFPL/C.Excise/2010-11, dated 15th Sep, 2010 also stated that products mentioned in their said letter 15 Sep, 2010 are not manufactured by them. It is contended in the show cause notice that it ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 09-14 under para 6.2(b) stipulates that the goods imported by the EOU shall be with actual user condition and shall be utilized for export production. (iv) Whereas Para 6.15 of the Foreign Trade Policy 2004-2009 and 2009-14 allows sale of unutilized raw material if they are unable to utilize the raw material imported or procured from DTA, by the way of transfer to another EOU/disposed off in DTA with approval of Customs authorities and on payment of applicable duties or exported. (v) Para 2 of Board's Circular No. 91/2002-Cus., dated 20-12-2002 allows sale of unutilized material to DTA unit or to another EOU only in exceptional cases and cannot be a regular feature for the units. In nutshell, show ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he same. He submits that as per the EXIM Policy, manufacture was not restricted to activity as stipulated under Section 2(f) of Central Excise Act, 1944, but definition of manufacture in EXIM Policy is much wider and the same includes the activity such as repacking and re-labelling, etc. Therefore, in the case of 100% EOU which is governed by the EXIM Policy, definition of manufacture provided under the EXIM Policy shall be adopted and not manufacture as provided under Section 2(f) of Central Excise Act, 1944. Therefore, the charges of the show cause notice become Null and void, once it is accepted that the appellant have carried out the activity of repacking and re-labelling which amount to manufacture and since the said activity amounts t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n fulfilled. In absence of such, vital condition of manufacture, there is violation of condition prescribed under both the notification and consequently denied both the notification; therefore, the demand confirmed by the adjudicating authority is sustainable. 5. We have carefully considered the submissions made by both sides. 6. The adjudicating authority confirmed the demand by denying the Notification No. 22/2003-C.E., dated 31-3-2003 on the indigenous procured goods and under Notification No. 52/2003-Cus., dated 31-3-2003 on imported goods only on the ground that the said procured goods have not under gone, the process of manufacture and cleared for export without carrying out manufacturing activity and accordingly violated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ivity. However, we find that the ld. Commissioner have not given any emphasized on the aspect of re-packing and labelling/re-labelling as manufacture. The Commissioner has also not discussed in his order whether the re-packing and labeling has taken place and in what manner. We are of the view that, if re-packing or labeling activity or both has been carried out by the appellant, then activity shall be treated as manufacturing activity and squarely covered by the definition of manufacture as provided under EXIM Policy and in such a case whole basis of denial of exemption of both the notification does not survives. However since the Commissioner has not examined factual, aspect of re-packing or/and labelling/re-labelling of goods, matter des ..... X X X X Extracts X X X X X X X X Extracts X X X X
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