UNITED DISTRIBUTORS Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) THE appellant is in appeal along with an application for stay against the impugned order wherein the duty demand of Rs. 1,23,29,946/ - has been confirmed along with interest and equivalent amount of penalty. Redemption fine of Rs. 1 crore has also been imposed on the appellant. Brief facts of the case, are that the appellant is engaged in the activity of importing and trading of goods like perfumes, shampoos, body spray, fruit juice based drinks, etc., falling under Chapters 15, 18, 19, 20, 21, 22, 33 and 85 of the Central Excise Tariff Act, 1985 (CETA, 85). The goods imported by the appellant are required to pay duty on MRP basis as per Section 3 of the CETA, 85. As the appellant was fixing sticker in their warehouse after clearance of the goods by discharging duty on the basis of MRP less abatement, the Revenue issued a show cause notice to the appellant on the premise the activity of fixing stickers amounts to manufacture as per Section 2(f)(iii) of the Central Excise Act, 1944. Therefore, the goods were seized and impugned proceedings were initiated. The learned Commissioner held that the activity amounts to manufacture therefore the duty demand was confirmed along with interest and equivalent amount of penalty was also imposed. The goods were allowed to be redeemed on payment of redemption fine of Rs. 1 crore. Aggrieved by the said order, the appellant is before us.

(2.) AS the matter came up for several times before this Tribunal and this Tribunal was of the view that the stay application has to be heard along with appeal therefore we take up the appeal as well as the stay application together for final disposal.

(3.) THE learned Counsel for the appellant submits that after import of goods wherever it was found that label/sticker was damaged or missing they carried out the activity of stickering and re -labeling on the said goods as prescribed under the relevant statutes. Therefore, their activity does not amount to manufacture as per the decision of this Tribunal in the case of L'Oreal India Pvt. Ltd. vide Order Nos. A/422 -430/2014/EB/C -II, dated 13 -6 -2014 (2014 (308) E.L.T. 746 (Tri. - Mum)). He further submits that as it is a case of revenue neutrality, as they have paid CVD on the imported goods on MRP basis. If their activity happens to amount to manufacture, then they are entitled to take CENVAT Credit of the CVD paid by them. As MRP remain same the liability of the duty shall be equal to the CENVAT Credit of CVD. In these circumstances, the learned Advocate prays that the impugned order is required to be set aside.