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TMI Blog2005 (5) TMI 222X X X X Extracts X X X X X X X X Extracts X X X X ..... ked with the master samples maintained at the factory and their conformation to strict quality requirements is ensured. (iii) The bottles/godets/tubes/containers etc. are filled in the factory and in case of bottles the fitment of pumps, actuators and collars, is carried out. (iv) Individual cartons and liners are folded and kept ready for packing of the required products. (v) The bottles are spray tested on the conveyor and then inserted in individual cartons which are subsequently labelled. (vi) After the various products are put in their respective individual cartons and the individual cartons are labelled, the activity of cellophaning of individual cartons is carried out. The BOPP films used for cellophaning are cut to specific sizes and cellophaning is carried out either manually or with the cellophaning machine. (vii) The cellophaning cartons are assembled and assorted as per the customers requirements and then placed in inner cartons which are then labelled. (viii) The inner cartons are segregated and assorted as per customers requirements and subsequently placed in outer cartons, gum taped, strapped and labelled as per shipment specifications. (b) PROCESS B : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... subsequently labeled. (iv) After the various products are put in their individual cartons and the individual cartons are labeled, the activity of cellophaning of individual cartons is carried out. The BOPP films used for cellophaning are cut to specific sizes and cellophaning is carried out either manually or with the cellophaning machine. (v) The cellophaned cartons are assembled and assorted as per the customers requirements and then placed in inner cartons which are then labelled. (vi) The inner cartons are segregated and assorted as per the customers requirements and subsequently placed in outer cartons, gum taped, strapped and labelled as per shipment specifications. And export the resultant bottle of perfumes, deodorants, eau-de-edene etc. 1.2 Imports made were claimed and cleared on BEs filed by claiming the benefit of notification 133/94-Cus., 9 such BEs were cleared during the period September, 1999 to December, 1999. However vide letter dtd. 7-12-99, the Appraising Office directed them not to use the good till the finalisation and on 17-1-99, a show cause notice was issued for the 9 BEs demanding duty, by denial of the exemption on the grounds - (i) the consign ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to Chapter 34 and the activities undertaken only would render goods, marketable to ultimate consumer. (v) Imported material conformed to notification 133/94 and the Exim Policy and were thus permitted. (vi) The authority were informed about the activity. Therefore the notice was required to be dropped and imports not to be interdicted. 1.4 Subsequent to this reply from the noticee, a corrigendum dtd. 22-1-2000 was issued by enhancing the demand by demanding duty at rates in Medicinal and Toilet Preparations (Excise duty) Act, 1955 (hereinafter referred to as MTP Act) the new facts alleged in this corrigendum which came to notice were - (i) Subject consignments contain Alcohol and were not classified under Chapter 33 of the Central Excise Tariff Act, 1985 and were to be assessed vide MTP Act in view of Chapter No 1(d) of Chapter 33. (ii) Out of the 9 BEs, 5 imports, were through Kandla Port which was not a specified Port of Entry as per Rule 43(a) and therefore the imports were in violation of Drugs and Cosmetics Rule, 1945 read with Customs Act, 1962. 1.5 The corrigendum was replied on 25-8-2000 inter alia contenting - (i) no new facts as alleged were brought out same ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch export. (iv) Chapter note 4 of Chapter 33 stipulates labelling, relabelling of containers, repacking, and adoption of other treatments to make the products marketable amount to manufacture. Examination of the processes employed by the noticee reveal that they are only putting a sticker which cannot be termed as labelling or relabelling. The goods imported in filled bottles of measured doses are sold as such. Therefore, it cannot be construed as repacking from bulk packing to retail pack. Further, the noticee is not undertaking any treatment to make the products marketable nor the physical aspect of the product is changed or modified by the use of processes employed by the noticee. Therefore, the processes employed by the noticee in respect of the instant consignments does not amount to manufacture u/s 2(f) of the Central Excise Act, 1944. (v) The contention of the noticee that Para 3.31 of the Exim Policy envisages even processes such as refrigeration, repacking, polishing, labelling and segregation, as amounting to manufacture is relevant only for the purposes of export. For clearances to DTA market, Notification No 133/94-Cus. specifically makes provisions under Para 3 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... points of entry specified in Rule 43(a) and as per Rule 43(a), such items are allowed to be imported through Madras, Calcutta, Bombay and Cochin Sea Ports, Madras, Calcutta, Bombay, Delhi and Ahmedabad Air Ports. Therefore, it becomes obvious that Kandla Port is not covered under this Rule for importing the drugs and cosmetics containing alcohol. Hence, four consignments covered under Bs/E Nos. 1135, dtd. 30-9-99, 1624, dtd. 10-2-99, 1770, dtd. 30-12-99 of a total assessment value of Rs. 40,58,720/- are ordered for confiscation in terms of Rule 133 of the Drugs and Cosmetics Rules, 1945 read with Sections 111(d) and 111(o) of the Customs Act, 1962. 1.8 Commissioner therefore passed the following order : "(i) I hold that the process employed by the notice in the instant consignments do not amount to manufacture in tenure of section 2(f) of the Central Excise Act, 1944. (ii) I confiscate the goods in respect of the four consignments covered under Bs/E Nos. 1135, dtd. 30-9-99, 1624, dtd. 10-12-99, 1770, dtd. 30-12-99 and 1171, dtd. 30-12-99 of a total assessement value of Rs. 40,58,720/-. However I impose a penalty of Rs. 5,00,000/- (Rupees Five lakhs only) in lieu of confiscatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s ordered, since they have been arrived without application of mind. (c) We find that the proposal was to deny the benefit of duty under claim of Notification 133/94 that has not been ordered. Indeed the ld. Commissioner has ordered. "(i) I hold that the process employed by the notice in the instant consignments do not amount to manufacture in tenure of Section 2(f) of the Central Excise Act, 1944. (ii) I confiscate the goods in respect of the four consignments covered under Bs/E Nos. 1135 dtd. 30-9-99, 1624, dtd. 10-12-99, 1770, dtd. 30-12-99 and 1171 dtd. 30-12-99 of a total assessment value of Rs. 40,58,720/-. However I impose a penalty of Rs. 5,00,000/- (Rupees five lakhs only) in lieu of confiscation. (iii) I impose a penalty of Rs. 10,00,000/- (Rupees ten lakhs only) on the notice under Sections 111(a) and 111(o) of the Customs Act, 1962. (iv) the goods imposed may be used for the purpose of processing for export out of India." While we would agree that the presence of Alcohol in the produced would render the levy in them to be not under the provision of the Central Excise Act, 1944; thus the definition under Section 2(f) thereof and its coverage would not be call ..... X X X X Extracts X X X X X X X X Extracts X X X X
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