CX -Tanker is not bulk pack, therefore, activity of unloading edible oil and converting into retail pack and labeling is not manufacture: CESTAT
By TIOL News Service
MUMBAI, FEB 17, 2017: THE case of the Department is that the activity of conversion of edible oil from tanker to retail pack and labeling amounts to manufacture u/s 2(f) of CEA, 1944 and accordingly, the repacked refined edible oil is liable to duty.
In appeal before the CESTAT, the appellant submitted that the issue is no more in dispute as in the appellant's own case decided by the Tribunal vide Order No. A/90742/16/EB dated 01.09.2016, it has been held that repacking of RBDP almolein Oil received in tanker in bulk and repacking them into smaller packs does not amount to manufacture. Reliance is also placed on the decisions in Anwar Oils - 2015-TIOL-2837-CESTAT-MUM, Amritlal Chemaux Ltd. - 2015-TIOL-130-SC-CX, Ammonia Supply Co. - 2011-TIOL-1400-CESTAT-MUM, Ruchi Health Foods Ltd. - 2006-TIOL-1948-CESTAT-MAD.
The AR submitted that the demand of duty has been correctly raised and confirmed in view of Chapter Note 4 to Chapter 15 of the CETA, 1985, which reads -
|"4. In relation to products of sub-heading Nos. 1502.00, 1503.00, 1504.00 and 1508.90, labeling or relabeling of containers and packing from bulk packs to retails packs or the adoption of any other treatment to render the product marketable to consumer, shall amount to manufacture."
On the Chapter note referred by the AR, the Bench observed -
+ From the chapter note, it is seen that if the goods are repacked from bulk pack to retail packs and also labeled then the activity shall amount to manufacture.
+ In the facts of the present case, the edible oil received in the tanker was unloaded and then converted into retail pack and labeled. As per the judgments relied upon by the appellant, it has been consistently held that the conversion of the product from tanker to retail pack is not conversion of bulk packs to retail packs because the tanker in which goods are received is not bulk pack, therefore, one limb of the Chapter Note that packing from bulk pack to retail pack does not satisfy.
+ Though there is an activity of labeling but as per the Chapter Note 4 prevailing at the relevant time, the activity of repacking from bulk pack to retail pack and also labeling, both should be carried out in order to hold manufacture under Note 4 to the Chapter 15.
+ There is no activity of repacking from bulk packs to retail packs and only labeling alone is carried out, therefore, the activity does not amount to manufacture.
The impugned order was set aside and the appeals were allowed.
In passing: Interestingly, in the matter of the stay application filed by the appellant, the Bench had ordered a pre-deposit of Rs.1 lakh. See - 2006-TIOL-658-CESTAT-MUM