Packing Material Makers stop clearances after Excise controversy

the Appellate Tribunal was right in holding that the second reassessment proceedings were not validly initiated and thereby quashing the reassessment proceedings-the proceedings initiated by the AO for the second time under Section 147 is barred by limitation-even the proviso to Section 147 does not come into play on the facts of the case-AIT-2010-373-HC Even if the goods belong to same entry, manufacture does take place if new identifiable/marketable goods known in market emerge due to operation conducted-the process of ironing applied to the stiched brassieres prior to their packing was a process incidental to the completion of the brassieres as a manufactured product-process of purification and filtration being incidental or ancillary to the manufacture of a marketable product, the Respondent was entitled to Modvat credit on the inputs involved-AIT-2010-370-HC Larger Bench of CESTAT rules the Tribunal has ample power to condone the delay in filing the appeal including the one filed under section 35 E (4)-AIT-2010-372-CESTAT Corruption in IRS takes its toll-Deputy Commissioner of Income Tax Dhananjay Kumar arrested by CBI in Mumbai-Joint Commissioner of Customs & Excise Hemant Kothikar also arrested by CBI FM directs expediting of Cadre Restructuring in CBDT & CBEC Tariff Value for import of Brass Scrap is 3924-Customs Non-Tariff Notification No. 78 Chief Justice of Gauhati High Court Justice Ranjan Gogoi to be Chief Justice of Punjab & Haryana High Court Anti-dumping duty on imports of Acrylic Fibre originating in, or exported from Japan and Belarus-Customs Tariff Notification No.85 Prescribing SION for new product “Propylene” under Chemical & Allied Products Group-DGFT PN 7 Inclusion of Finished Leather in the Focus Product Scheme of FTP-DGFT PN 6 Exchange Rate for imported goods is Rs 47.25 per US Dollar and Rs 60.35 per EURO-Exchange Rate for export goods is Rs 46.30 per US Dollar and Rs 58.70 per EURO-Customs Non-Tariff Notification No. 77-Click on Exchange Rate for details Anti Dumping Duty under the Notification No.15/2007 is not applicable to Spandex Yarn (Elastomeric yarn)-Customs Circular No.30 Import of goods under Notification No.13/2010 for Commonwealth Games, 2010-Customs Circular No.31 Larger Bench of CESTAT rules charges towards pre-delivery inspection and after-sale-service by dealers from buyers of the cars to be included in the assessable value of cars for payment of excise duty-AIT-2010-366-CESTAT merely because there was non accounting of goods, penalty was technical and inference of clandestine removal was not called for-AIT-2010-365-HC ITAT rules provision for doubtful debts and provision for standard debts are to be taken into consideration for computation of book profit u/s. 115JB of the IT Act-AIT-2010-361-ITAT HC rules slitting of aluminum foils into customized width, mounting the same on the printing machine and thereafter printing the necessary text thereon is covered for 80IB benefit as it falls within the ambit of the term “produce”-AIT-2010-363-HC Definitive Anti-dumping duty imposed on imports of Coumarin, originating in, or exported from China-Customs Tariff Notification No. 82 Special Bench of ITAT Ruling-where a forward contract is entered into by the assessee to sell the foreign currency at an agreed price at a future date falling beyond the last date of accounting period, the loss is incurred to the assessee on account of evaluation of the contract on the last date of the accounting period i.e. before the date of maturity of the forward contract-AIT-2010-355-ITAT-SB

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Packing Material Makers stop clearances after Excise controversy

AIT News Network

NEW DELHI. AIT Office is flooded with calls from Packing Material Makers as the Rumour is hot for last couple of days that small-scale excise exemption is no more admissible to Packing Material manufacturing Units as they are printing the Brand names of others on the Packing Material and hence the exemption of Rs 1.5 Crore turnover under Central Excise Tariff Notification No.8/2003 does not apply to them.

The Packing Material Makers have stopped clearances with effect from 1st April 2008 and are in a dilemma as to whether avail the exemption or to start paying excise from very beginning of the year.

AIT Team did some research and found out that the root of the rumours is a communication C.No. V(30)Tech/Packing Material/64/07/2685/19.02.08 dated 19.2.2008. issued by the Commissioner of Central Excise, Kanpur which is as under:

“Sub : Non applicability of Notification No. 08/2003 on the packaging material bearing other’s brand – reg.

Please refer to the undersigned’s letter C. No V(30)Tech/Packing material /64/2007/31-33 and 848-49 dated 16.01.08/21.01.02008 on the subject as mentioned above.

In the above context, the matter has been Re-examined. On re-examination, it is observed that even though the packing material as mentioned in the said letter dated 16.01.08/21.01.08 of the undersigned may not be used by the packing material manufacturer for packing and clearing any other goods from his factory with the help of such packing material, such packing material itself is classifiable under a definite tariff item by virtue of its own identity as a separate excisable goods and such packing material is also specified in the SSI exemption as one of the goods entitled to the said exemption subject to the fulfillment of the conditions of SSI exemption . Therefore , since such packing material is also a specified goods for the purpose of the SSI exemption , such packing material is also a specified goods for the purpose of SSI exemption such packing material affixed with the brand names of others will not be entitled to the benefits of the SSI exemption in view of the Hon’ble Supreme Court’s order in the case of Kohinoor Blastic Pvt Ltd Vs CCE , Indore (2005(188)ELT3(SC) and in the case of CCE Chandigarh Vs Bhalla Enterprises (2004(178)ELT-225(SC) . There are several CESTAT judgments also in support of such a view.

Accordingly, the instructions contained in the undersigned’s letter No V (30) Tech/Packing material/64/2007/31-33 and 848-49 dated 16.01.08/21.01.2008 on the subject as mentioned above may please be treated as modified to the above extent and action may taken accordingly . In this regard, attention is also invited to the clarifications given vide the undersigned’s DOC no. 02/Commr/KNP/Rev Tar/06/11939-46 dated 06.10.07 and of even C No. 14793 -800 dated 20.12.07 which will remain unaltered.”

Thus according to views of the Commissioner of Central Excise, Kanpur, the packing material affixed with the brand names of others will not be entitled to the benefits of the small –scale excise exemption of Rs 1.5 Crore clearances.

According to RS Sharma Advocate the small-scale exemption is admissible to manufacturers of packing material who are printing the Brandname or Tradename of their clients on the packing material as the packing material itself cannot be treated as Branded goods within the ambit and scope of the Notification. In fact the goods which are packed inside the packing material are to be treated as Branded goods. The views of learned Commissioner of Central Excise do not reflect correct interpretation of exemption Notification No. 8/2003 .Further, even the cases cited in the communication do not apply in such cases. Instead of jumping the gun by issue of controversial communication; the learned Commissioner should have referred the matter to CBEC for issue of clarification in such matters. The clients have already been advised to avail the exemption, Sharma added.

It is high time CBEC clears the air on the issue through a clarification so that the sword of demand and litigation does not hang on the neck of manufacturers.