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TMI Blog2022 (3) TMI 227X X X X Extracts X X X X X X X X Extracts X X X X ..... alled packing from bulk to retail. It is the other way round. Whether the appellant is also carrying out any other process so as to render the product marketable? - HELD THAT:- The appellant s position has constantly been that it has not carried out sieving or any other process and hence the activity would not amount to manufacture and hence no duty is payable. Its purchase invoices did not indicate the grade of the activated carbon. On its request, in some of the invoices the suppliers had indicated the grade later. Hence, there was a difference in hand writing which is presumed by the Revenue to be manipulation of invoices. It produced letters from the suppliers to buttress this assertion. Apart from the fact that its purchase invoices / bill of entry do not indicate the grade of the material, while the sale invoices indicate the grade there is no other evidence brought on record by the Revenue that the Activated Carbon was sieved by the assessee. Since the assessee is registered with the Central Excise Department, officers could have gone and inspected and found out if the appellant had the equipment required for sieving the activated carbon to the required grades and was also c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r, it is made clear that both parties would be entitled to argue all points of law and fact available to them, when the appeals are reheard by the Tribunal pursuant to the order dated 25.03.2019 in Miscellaneous Application No. M/30161/2019. No order as to cost." 3. The matter has now been listed and we have heard both sides and perused the records. 4. We find that the main contention of the appellant before the High Court in Central Excise appeal was that only one application seeking rectification of mistakes E/ROM/30090/2019 dated 18.1.2019 was filed by the appellant seeking rectification of mistake in the final order in appeal E/684/2009 and the Department had not filed any application seeking rectification of mistake. Application No. E/ROM/30086/2019 was wrongly listed in cause list dated 13.3.2019 as Item No. 10 as if the Department had filed a rectification of application with that number in the Department's appeal no. E/827/2009. The Miscellaneous orders dated 25.3.2019 was passed recalling order No. A/30732 & 30733/2018 dated 19.7.2018 on the ground that there was an error apparent on record which needed rectification. The contention of the appellant assessee before the H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s were disposed of by the Miscellaneous order dated 25.3.2019. However, in the heading E/Misc./30086/2019 was wrongly mentioned as E/ROM/30086/2019. A further mistake in the heading was that instead of mentioning both the applications against both the appeals (as they were filed by the assessee), Miscellaneous application 30086/2019 was shown against Appeal No. E/827/2009 and miscellaneous application 30090/2019 was shown against E/684/2009. We also find that there was inaccuracy in the first sentence of the Miscellaneous Order which says "these two applications are seeking rectification of error in Final Order No. A/30732 & 30733/2019 dated 19.7.2018. It should have been written as application E/ROM/30090/2019 and the application E/Misc./30086/2019 seeking early hearing of the application for rectification of mistakes were filed by the assessee appellant in Appeals No. E/684/2009 and E/827/2009. In other words, the submissions made by the appellant before the Hon'ble High Court were not correct as follows: (i) It was presented before the High Court that its application for rectification of mistake E/ROM/30090/2019 was filed only in Appeal No. E/684/2009, whereas the application f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oresaid amount was also demanded and penalty was proposed to be imposed under 11AC of the Act read with Rule 25 of the Central Excise Rules, 2002 for contravention of Rules 4, 6, 8 and 9. 10. The Commissioner passed the impugned order confirming a demand of only ₹ 35,93,990/- along with interest and imposing a penalty of equal amount under Section 11AC. The remaining part of the demand was dropped. 11. Revenue is aggrieved that the Commissioner dropped the remaining part of demand on the ground that certain purchase invoices produced by the assessee are themselves in retail packages of 50 kgs, 45 kgs, 40 kgs. etc. According to the Revenue, this conclusion of the Commissioner was contrary to the findings in the impugned order in paragraph 21 wherein it was held that there is no evidence to show that such packs were sold as such. Revenue's prayer is that the entire demand as proposed in the show cause notice should be confirmed. Assessee's appeal seeks dropping of the entire demand and the penalties imposed. 12. It is the case of the assessee that the entire demand in the SCN was based on details provided by it. For the period 2004-2008, it had repacked 1,920 bags of 50 kg f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that they had not received the subject goods in any retail packages but the material received in bulk were unpacked and repacked to suit the needs of the customers. 20. The sale invoices clearly indicate that sales were affected in retail form only, which is possible only after converting the bulk in to marketable form. As per Annexure I, the total stock details, produced by the assessee along with written submissions dated 18.02.2009, it is clearly mentioned that they have packed 3840 bags of 50 KGs during the year 2005-06 and 8744 bags of 50 KGs during the year 2006-07 after aggregation of 25 Kgs bags. This statement of the assessee is contradictory to their earlier stand that they sold the goods as such and there was neither packing nor repacking. In view of the above, it is evident that the assessee has undertaken the process of reprocessing and repacked the same in different retail bags." 13. The assessee further submits that the impugned order also states the purchase invoices were manipulated and grades of 450 IV, 500 IV, 550I V, 600 IV, 650 IV, 700 IV, 800 IV, 900 IV were inserted later by the appellant. The contention of assessee is that the aforesaid numbers refer to g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... short point to be decided in this case is whether from the evidence available, the appellant had labelled or relabeled and re-packed activated carbon from bulk to retail or carried out any other process to render it marketable so that its activities fall under Chapter Note 9 to Chapter 38 of the Schedule to Central Excise Tariff Act, 1985. If so, whether it would amounts to manufacture and the appellant is liable to pay Central Excise duty and not otherwise. 20. It is undisputed that the appellant is selling activated carbon in bags with its own name pre-printed on them. Thus, if the appellant is selling the goods with its own name on the packets, it is labeling the product. 21. The next question is whether it is also packing from bulk to retail packs. From the data presented before us, which is also the basis of the SCN, it is evident that the appellant had in some cases packed 25 kg bags into 50 kg bags, i.e., from smaller bags to larger bags which cannot be called packing from bulk to retail. It is the other way round. 22. The next question is whether the appellant is also carrying out any other process so as to render the product marketable. The show cause notice alleges tha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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