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TMI Blog1986 (9) TMI 252X X X X Extracts X X X X X X X X Extracts X X X X ..... red the quantity so packed in their RG-1 register and were not paying duty on the same but were repacking the same into small packings of one kilogram, 500 grams and 100 grams, with intent to evade payment of central excise duty. The period of evasion covered by the notice was mentioned as, 7-4-1983 to 30-9-1983. On receipt of reply and after adjudication the Collector of Central Excise, Meerut passed orders on 30-9-1985 holding the charge established. Under the said order he demanded duty amounting to Rs. 32,15,300.80 (basic) and Rs. 1,60,765.04 (special). He further imposed a penalty of Rs. 10,000/-. It is against the said order that the present appeal has been preferred. 2. We have heard Shri V.G. Taraporewala, Advocate assisted by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in 25 Kilogram polythene bags received from the hopper and the same was covered by Item 1 of the classification list dated 7-4-1983 but yet the same was not entered in the RG-1 register and no duty was paid thereon. (b) The contents of these bags were later repacked into smaller bags containing 1 kilogram, 500 grams and 100 grams which were again later put in larger packets or cartons on which particulars such as name of the factory, batch number, code number and quantity packed etc. were noted. (c) These were later cleared to branch offices and not by way of sale at the time of clearance. (d) In the manner of clearance as above mentioned it could ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the interpretation put upon the terms of Rule 9 in the show cause notice as to whether the removal should be by way of sale itself. In a further reply dated 27-6-1984 they further relied upon a trade notice 82/83 dated 27-9-1983 issued by the Meerut Collectorate and also a trade advice of 1969 as to the definition of a unit container. 6. In his submissions before us the learned counsel raised all the above arguments and contended that what was received from the hopper in the polythene bags would not require entry in the RG-1 account as manufacture of the product became complete only after the subsequent testing (which was statutorily required under the Prevention of Food Adulteration Act) and packing by way of air tight heat sealing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hene bags. As earlier mentioned, receipt of the powder from the hopper into loose polythene bags appears to be for the purpose of subsequent tests and later packing in smaller unit containers. When the powder is received in such lose polythene bags the mouth of the bag is merely tied with cotton tape. It is not the case for the Department that SMP packed in this way is ever sold to customers. In the circumstances the conclusion of the Collector, based on the description in Serial No. 1 of the classification list, does not appear to be proper. On the other hand the explanation of the appellants, that receipt from the hopper into such loose polythene bags was only for the purpose of subsequent testing and packing in smaller unit containers wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ;In this connection the appellants rightly point out that they do supply SMP in large packings to customers who require SMP packed in larger unit containers and that on all removals of such SMP in large containers (such as 25 kilograms) duty is paid by them. Nor is this disputed by the Department. 11. Another point raised in the show cause notice is that the smaller unit packings packed into a larger unit packing were being cleared to branch offices and not by way of sale at the time of clearance itself and this circumstance would lead to denial of the benefit of the exemption notification. This would appear to suggest that if the assessee is to be held entitled to the benefit under the notification the removal from the factory itself ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ams containers, duty being paid by the appellants on all such removals. 13. As pointed out by the Learned Counsel for the appellants, if under the terms of the notification a benefit would accrue to the assessee the court or the Tribunal would not be entitled to deny the benefit of the said exemption merely on the basis that the Government would not have intended to confer such a benefit in a particular case. The decisions in the Hans Raj Bodh Raj case (1978 E.L.T. 350 Supreme Court) and Tata Iron Steel Co. case (1977 E.L.T. 61 Supreme Court) support this contention. 14. Shri Vineet Kumar contended that even when the smaller unit packings were later packed in larger packings the said larger packing also contained details which w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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