E/669/2009 (Arising out of Order-in-Original No. 23/2009 dated 15.9.2009 passed by the Commissioner of Central Excise, Chennai III) and Final Order No. 40987/2015. Case: Shriram Pistons & Rings Ltd. Vs CCE, Chennai-III. CEGAT (Customs, Excise & Gold (Control) Appellate Tribunal) & CESTAT (Customs, Excise and Service Tax Appellate Tribunal)
| Case Number | E/669/2009 (Arising out of Order-in-Original No. 23/2009 dated 15.9.2009 passed by the Commissioner of Central Excise, Chennai III) and Final Order No. 40987/2015 |
| Counsel | For Appellant: Raghavan Ramabhadran, Advocate and For Respondents: L. Paneerselvam, AC (AR) |
| Judges | R. Periasami, Member (T) and P.K. Choudhary, Member (J) |
| Issue | Central Excise Act, 1944 - Sections 2 (f)(iii), 2(f), 2(f)(iii) |
| Judgement Date | July 17, 2015 |
| Court | CEGAT (Customs, Excise & Gold (Control) Appellate Tribunal) & CESTAT (Customs, Excise and Service Tax Appellate Tribunal) |
Order:
P.K. Choudhary, Member (J), (South Zonal Bench, Chennai)
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This is an appeal against denial of CENVAT credit. The appellants are engaged in the manufacture of piston, piston rings, piston assemblies etc falling under Chapter Sub Heading 8409 9114 of the First Schedule to the Central Excise Tariff Act, 1985 for automobiles at the appellants factory at Ghaziabad and cleared on payment of duty on stock transfer basis to the appellants unit at Hosur. The piston and piston rings are repacked and re-labelled with part number and supplied to the customers like TVS Motors and Ashok Leyland on just in time basis on payment of duty. The adjudicating authority disallowed the CENVAT credit of Rs. 2,05,36,106/- under Rule 14 of CENVAT Credit Rules, 2004 and imposed equivalent penalty (Oct. 2007 to June 2008), he also confirmed Rs. 1,02,96,279/- in respect of other show-cause notice and imposed equal penalty (July 2008 to Feb. 2009). Hence the present appeal.
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The learned counsel for the appellant submits that the issue involved in this case is denial of CENVAT credit on stock transfer from Ghaziabad to Hosur. The goods are labelleld at Hosur and sold which would amount to manufacture under Section 2(f)(iii) of the Central Excise Act, 1944 and thus the inputs used for such activities are eligible for CENVAT credit. The learned counsel further submits that Section 2(f)(iii) of the Central Excise Act, 1944 deems the activity of packing/repacking or labelling/relabelling as a process of manufacture if it renders the product marketable to the customer. The appellant-assessee upon receipt of goods from their Ghaziabad factory, unpacks it and packs it according to the requirement of the buyers. This repacking is essential because the goods received from the Ghaziabad unit are based on approximate requirement which is not the same as the actual requirement. Subsequently, they affix labels on the packages indicating the contents of the box and the details of the buyer. He further submits that repacking and relabelling is necessary to render the product marketable. He relied on the decision of the Tribunal in the case of Nestle India Ltd. Vs. CCE, Chandigarh 2011 (270) ELT 575. He further submits that the packages received from the Ghaziabad unit are not complete until they are specifically packed and labeled as per the requirements of the customers. In the automobile industry, part number is an important identification and essential of labeling. He...
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