Page 222 - ELT_1_1st April 2020_Vol 372_Part

108 EXCISE LAW TIMES [ Vol. 372

The issue No. 2
33. We have gone through the show cause notice issued to the appel-
lant and no classification was proposed in the show cause notice. However, dur-
ing the course of adjudication, the Commissioner have travelled beyond the alle-
gation in the show cause notice and classified the impugned products under sub-
heading 8443 99 51/52 of Central Excise Tariff without assigning any rea-
son/evidence. It is settled law, that the show cause notice is the foundation of the
case on which the Revenue has to form its case and in the absence of any allega-
tion with regard to the classification, in the circumstances, the adjudicating au-
thority cannot change the classification of the products. Therefore, the impugned
order classifying the goods under 8443 99 60 is beyond the scope of show cause
notice. We further find that the Commissioner has held that the item in question
are parts or accessories of printer but we have seen there is no relationship with
the printers but merely the container in which ink is contained carrying out
printing functions. The printer does not have any interface with the impugned
items as the container is unscrewed and the manifold assembly is placed on top
of the container from where the pump draws ink to be supplied to the print head
assembly.
34. We have also seen that at the time of import of already filled con-
tainers. The classification declared by the appellant was accepted by the depart-
ment, therefore at this stage the same cannot be allowed to be classified the
product under different sub-heading.
35. We have also seen that the Commissioner has given finding qua
sump chips has been applied across all the impugned items. The sump chip is to
read only memory containing ink identity information and was affixed to old
technology printers. The sump chip has no bearing on the ink filed into the res-
ervoir as it merely is a repository of information regarding the ink filled into the
container. Therefore, we hold that classification changed by the Commissioner is
not sustainable.
Accordingly, the issue No. 2 is also answered in favour of the appellant.
The issue No. 3
36. We find that the imported ink container, the appellant has availed
credit of CVD paid by them on the premise that the activity of refill-
ing/relabelling. As discussed above, as per Chapter Note 7 to Chapter 32, the
activity undertaken by the appellant does not amount to manufacture. Therefore,
the appellant is not entitled to avail credit of CVD paid by them at time of im-
port. But as per the decision of the Hon’ble High Court of Bombay in the case of
Ajinkya Enterprises (supra), by upholding the finding of this Tribunal that if the
activity does not amount to manufacture and the goods have been cleared on
payment of duty, in such case, the duty paid by the assessee which has been ac-
cepted by the department and more than the credit availed. In that circumstance,
the duty paid by the assessee shall amount to reversal of credit and the assessee
is not required to reverse the credit. Admittedly in this case, the appellant
cleared the said imported goods after refilling on payment of duty. Therefore, if
the activity does not amount to manufacture, in that case, the duty paid by the
appellant shall amount to reversal of credit. Therefore, the appellant is not re-
quired to reverse the credit of CVD availed by the appellant at the time of im-
port.
EXCISE LAW TIMES  1st April 2020  270