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TMI Blog2017 (7) TMI 754X X X X Extracts X X X X X X X X Extracts X X X X ..... rd of Weights and Measures Act, 1987 though provides for affixing the Retail Sale Price on packaged commodities, the said legislation has nothing to do with the question whether tune activity undertaken by the assessee amounts to manufacture or not. As per sub-clause (iii) of the said definition, packing / repacking or labeling or re-labelling would amount to the process of manufacture and the appellants have been able to successfully establish that such activities have been undertaken by them after purchase of the goods from various vendors till the goods are exported. The activities undertaken by the appellant amounts to manufacture and they are liable to avail CENVAT credit on the inputs / input services used in the export of goods - appeal allowed - decided in favor of appellant. - E/40619/2013 - 40787/2017 - Dated:- 15-5-2017 - Ms. Sulekha Beevi C.S. Member (Judicial) And Shri Madhu Mohan Damodhar, Member (Technical) Shri N. Venkataraman, Senior Advocate for the Appellant Shri A. Cletus, Addl. Commissioner (AR) for the Respondent ORDER Per: Bench The appellants are registered with the Central Excise Department for manufacture of Computer Bracke ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of these exports, the Company procures auto components / part from various local vendors within India according to the requirements given in the export order received by Glovis India. The said parts / components received from local vendors are checked for quality purpose, before being exported to various customers. Once the quality check is completed, the goods are removed from the Trolleys/Crates received from suppliers and are placed in unit containers and thereafter re-packed in a Carton box bearing the name Glovis . The above activity of procurement and export is generally referred by the Company as CKD operations and the said activity is monitored using Customized software which mentioned the type of parts / components that are to be packed. Individual parts / components that are sourced from various vendors and are sequentially in a manner that would be convenient for the Customers c n their assembly lines. This is because of the reason that these components / parts are in fact sub components of a main component of the automobile and sorting them in a specific manner will reduce the efforts for feeding various parts / components according to the assembly line requirements ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so, the demand cannot be sustained. 6. Against this, the learned AR Shri A. Cletus reiterated the findings in the impugned order. He put forth arguments adverting to the definition of manufacture specifically with regard to Section 2(f)(iii) of the Central Excise Act. Learned AR argued that the goods exported by the appellant cannot be said to be packed commodities and therefore it is not necessary to affix the retail sale price on these goods. Further, the goods are exported in bulls for which reason also the necessity to affix retail sale price does not apply as provided in the Standard of Weights and Measures Act, 1987 / Legal Meterology Act, 2009. Further, the labeling done by the appellant is only to facilitate the receipt of goods to the consignee and is not connected with the manufacture. The labeling as mentioned in sub-clause (iii) of section 2(f) is label that is required to be affixed for informing the consumer about the manufacture. In the present case, the appellants are affixing the labels only for the purpose of giving details necessary to deliver the goods to the consignee and therefore the activity of labeling done by the appellants cannot be considered to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erefore, the. first ingredient in sub-clause (iii) of Section 2(f) is satisfied. 10. Now let us proceed to examine the various activities undertaken by the appellants before export or the products. The learned counsel has given a detail description with pictures wherein the various stages of the activity is sufficiently brought out with all minute details. 11. The process of manufacture can be diagrammatically represented as under:- 12. When the appellant places purchase orders, the vendors will supply goods in metal pallets/trolleys. The goods in these metal pallets/trolleys are send by the vendor in plastic crates/bins. The next stage is affixing identification tag on the goods received from the suppliers. Such identification tag will contain (1) the appellants purchase order number; (2) vendor name; (3) part number; (4) part name and (5) part quantity. The vendors also send the documents / delivery sheet along with the goods. The next stage is to prepare the GRN for goods received from vendors. GRN is prepared by scanning the bar code on the delivery sheet and entering the receipt from the vendors. After GRN process, the line feeding sheet / packing ticket will be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat such packing is only for the purpose of transportation and that the labeling is only for the purpose of identification are too flimsy and not backed by any legal basis. It appears that the learned AR is confused with the mention of the words retail sale price' and labeling' in section 2(f)(iii) of the definition of manufacture. It is contended by the learned AR that since the label affixed does not give any information to a consumer and is only to facilitate assembly of vehicle at Hyundai, Turkey, the activity of labeling does not amount to manufacture. This argument does not find favour with us. The Standard of Weights and Measures Act, 1987 though provides for affixing the Retail Sale Price on packaged commodities, the said legislation has nothing to do with the question whether tune activity undertaken by the assessee amounts to manufacture or not. As per sub-clause (iii) of the said definition, packing / repacking or labeling or re-labelling would amount to the process of manufacture and the appellants have been able to successfully establish that such activities have been undertaken by them after purchase of the goods from various vendors till the goods are expor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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