The Supreme Court (SC) on Thursday sought reply from Hindustan Coco-Cola Beverages as to why duty should not be levied on water treated and purified by the company for supply to vendors for producing aerated beverages.
A Bench headed by Justice SH Kapadia issued notice to Hindustan Coco-Cola Beverages (P) Ltd (HCCBL) on a petition filed by the excise department seeking to levy duty on treated and purified municipal or borewell water for supply to retail vendors for producing aerated drinks.
Challenging the Customs Excise and Service Tax Appellate Tribunal judgment that dismissed its plea, the department said according to Chapter notes to Chapter 22 of the Central Excise Tariff Act, any exhaustive process like adding bleach solution to kill micro organisms, treatments with lime, soda ash, bleaching powder etc and filtration through sand and carbon purifier, etc carried out on municipal or borewell water amounts to manufacture.
Appearing for the department, Attorney General GE Vahanvati said duty is leviable on goods which are subjected to any process like packing or repacking of such goods in a unit container or labeling or re-labeling of containers including the declaration or alteration of retail price on it or adoption of any other treatment on the goods to render the product marketable to the consumer.
?Even labelling or relabelling of the specified goods rendering them marketable to the consumer amounts to manufacture and thus liable to duty,? the petition stated.
It said HCCBL supplied treated water through canisters embossed with monogram coco-cola or stainless steel tankers without any marking on them to few retail outlets for producing aerated beverages dispensed through vending machines.
