Activity of Changing MRP / affixing MRP stickers in Godown amount to ‘Manufacture’: CESTAT [Read Order]

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The Delhi Bench of the Customs Excise & Service Tax Appellate Tribunal ( CESTAT ) in Amit Talwar vs. CCE, held that the activity of changing the Maximum Retail Price ( MRP ) or affixing the MRP stickers in godown amount to ‘Manufacture’ as per section 2(f)(iii) of the Central Excise Act,1944.

The Appellant is engaged in the business of importing and trading of various items like home appliances, shoes, furniture, hardware items etc.  The Departmental authorities carried out search operations at various premises of the appellant. Several goods covered under Third Schedule of the Central Excise Tariff Act, 1985 were seized from the godown of the appellant. From the investigation, the Department found that the appellant had imported goods bearing their brand name in which the MRP was not marked. Such goods after importation were affixed with MRP sticker and sold in the local market. Some consignments were imported in which MRP stickers were already affixed but post importation new MRP stickers were affixed and goods were sold in the local market; Goods were procured from indigenous manufacturers, the MRP was changed and such goods were also sold at the enhanced MRP.

The Revenue demanded Central Excise Duty from the appellant on the ground that the activity of changing the MRP/ affixing MRP stickers in their godown will fall within the deeming provision in Section 2(f) (iii) and consequently, Central Excise duty is required to be discharged in terms of Section 4A of the Central Excise Act. The appellant appealed before the CESTAT.

The bench comprising of Justice Dr. Satish Chandra and Technical Member V. Padmanabhan observed “we uphold the view that the activity carried out by TAPL as well as 3D will amount to manufacture as per Section 2(f)(iii) of the Act and hence, Central Excise duty is required to be paid on the basis of MRP but such Excise duty payable is required to be computed after extending the benefit of SSI exemption separately to TAPL as well as 3D.”

To Read the full text of the Order CLICK HERE