The Delhi bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) recently held that mere removing of the MRP stickers would not amount to ‘manufacture’ for the purpose of imposing excise duty.
In the instant case, the respondents were importing home appliances and were clearing the same on payment of customs duty on the basis of the MRP stickers available on the said goods.
During investigation, the Revenue noted that such MRP stickers were being removed by them. However, it also came to the notice of the officers that no fresh MRP was being declared under the said goods, which were being sold by the respondents without affixing the said goods with any new MRP.
On the basis of the above findings, the Revenue took a view that such removal of MRP sticker amounts to manufacture, in terms of Section 2(f) of Central Excise Act, 1944 which provides a deeming provision of manufacture if the goods are labelled or relabelled and includes the declaration or alteration of retail sale price to render the products marketable to the consumers.
On appeal, the Commissioner (Appeals) set aside the impugned order by observing that removal of MRP sticker, without affixing a new MRP does not amount to manufacture.
Dismissing the Revenue’s appeal against the order of the first appellate authority, the Tribunal observed that “There is no further allegation that any new MRP sticker were affixed to the goods in question. Admittedly, the provisions of Section 2(f)(iii) provides deemed manufacture definition only when the goods are labelled or relabelled or MRP is altered, which itself establishes the fact of a fixation of MRP on the goods. In the absence of any allegation of fixation or alteration of MRP, the reasoning adopted by Commissioner (Appeals) cannot be faulted upon.”To Read the full text of the Order CLICK HERE