Activity of repacking amounts to manufacture

Vaibhav Global Ltd. Vs Commissioner of Customs (CESTAT Delhi)

This Tribunal in the case of CCE vs Western Electronics reported as 2000 (116) ELT 181 (Tri) while relying upon the similar circular as mentioned above has held that packing of the goods into different packs amounts to manufacture and while exporting such goods, the activity of packing / repacking entitles the EOU to claim exemption from the customs duty while exporting such repacked goods. Tribunal Chennai also in the case of Bala Handlooms (Supra) held that though the activities like unpacking, labelling, stacking and repacking do not amount to manufacture under section 2F of the Central Excise Act 1944 but in terms of Board’s own circular the word manufacture has been a wider connotation to include activity as that of packing, repacking, etc. to amount to manufacture atleast for the purpose of extending the exemption benefits to the 100% EOU wile exporting such goods. Tribunal Mumbai also in Keva Fragrances (supra) has held that activity of repacking amounts to manufacture even under EXIM policy. As already held above there is no denial nor it is the case of the Department that the goods in question were not repacked by the appellant before exporting goods in question were not repacked by the appellant by exporting those goods again. As discussed above, the packing activity amounts to manufacture, it is held that the second condition of the impugned exemption notification that the goods have to be manufactured goods also stands complied with by the appellant. Adjudicating authority is held to have committed an error by holding the repackaged goods as non manufactured goods. The order under challenge to that extent is also liable to be set aside.

FULL TEXT OF THE CESTAT DELHI ORDER

2. Present appeal has been filed to assail the order in original no. 07/2020 dated 22.5.2020. The facts in brief relevant to the present adjudication are as follows:

That the appellant is an importer, a 100% EOU. Appellant filed Bills of Entry for clearances for re-import of goods having assembly value of Rs.9,95,98,022/- exported earlier on consignment basis as per the shipping bill details in the respective bill of entry. The aforesaid bills were filled under EOU scheme of notification no. 52/2003-Customs dated 31.3.2003. The appellant also claimed simultaneous exemption under notification no. 95/2017-Cus dated 30.6.2017. Department formed an opinion that the exemptions as claimed are inadmissible to the appellant for the want of the procedure under notification no. 59/2017 as stands amended vide notification no. 68/2017 dated 30.6.2017. The Department was also of the opinion that the exemption is not available to the appellant for the reason that the goods re-exported were not the manufactured goods of the appellant. With these observations the show cause notice no. 6646 dated 22.10.2019 was served upon the appellant. Proposing denial of exemption from Customs duty and integrated tax as was claimed by the appellant in terms of aforesaid notifications and proposing duty demand of Rs. 58,83,112/- along with demand of Rs.4,23,904/- with interest. Penalties were also proposed to be imposed upon the appellant. The said proposal has been confirmed vide order under challenge except that the demand for Rs.47,38,334/- was dropped. Still being aggrieved the appellant is before this Tribunal.

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