TMI Blog1999 (7) TMI 340X X X X Extracts X X X X X X X X Extracts X X X X ..... are sold. 3. The dispute in the present appeals relates to (4) above. Sometime ago, such oil in bulk was sent by the appellants to M/s. Unique Packers under the procedure prescribed in Rule 57F(3) of the Central Excise Rules, 1944, where the job workers would return the lubricating oil packed in smaller containers to M/s. Savita Chemicals Ltd. M/s. Savita Chemicals would then transfer the smaller containers to their depots and would sell from there. Similar procedure was adopted by M/s. Castrol India Ltd. It appears that in February, 1996 the department objected to this procedure. Vide letter, dated 25-10-1994, the department directed M/s. Castrol India Ltd. to clear the goods on payment of duty to their job workers holding that the activity of repacking in smaller containers did not amount to manufacture. The present appellants came to know of this development and therefore from February 1996 adopted the department s advice to M/s. Castrol India Ltd. for their clearances also. The goods were thereafter cleared in bulk to the packers on payment of duty. 4. Four show cause notices were issued to M/s. Savita Chemicals Ltd. alleging that the clearances of oil in bulk to M/s. Uniqu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e from the factory . It is his next submission that since the form of lubricating oil is changed between its clearance from the factory and the removal from the warehouse, the amended provisions would not apply. His concluding submission is that the duty payable has been wrongly calculated as part of the demand in the show cause notice, dated 6-6-1997 is barred by limitation and that the assessees were acting on good faith and on the basis of the department s advice to M/s. Castrol India Ltd. the levy of penalty was not warranted. 8. Shri Chatterjee advanced arguments rebutting the contentions made by Shri Lakshmikumaran and supporting the impugned orders. 9. We have carefully considered the submissions advanced by both the sides and have perused the citations. 10. The department s mind is reflected in the following paras of the show cause notice, dated 3-7-1998 : The clearance from M/s. Savita Chemicals Ltd. to M/s. Unique Packers are merely a transfer of goods to the said packer for repackaging into smaller pack transfer to various depots consignments agents etc. of M/s. Savita Chemicals for further sale by M/s. Savita Chemicals. Section 4(1)(a) of Central Excise Act, 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eld by the Tribunal in the case of Southern Bottlers P. Ltd. v. C.C.E. [1989 (43) E.L.T. 427 (Tri.)]. In terms of these judgments, the Tribunal in the case of Indian Aluminium Cables Ltd. [1989 (40) E.L.T. 86 (Tri.)] held even a single sale would constitute the basis for determination of wholesale cash price. In making this, the Tribunal had relied upon the Supreme Court judgment in the case of Voltas Ltd . [(1977 E.L.T. (J.177)]. 12. Thus where the price at which the sale is made to an independent buyer is available, that price becomes the basis of sale to other similar consumers and also for stock transfers to depots. Thus, if the sale price from the depot is higher than the price at which the stock transfer is made, the department cannot demand differential duty. 13. Nowhere in the proceedings had the department claimed that the price at which the sale of lubricating oil in bulk made to independent buyers as contrived or fake. Therefore, those prices would form the basis for valuation of the goods cleared for repacking. 14. In this situation, it is not material, whether the goods are sold or not. In the case of Collector of Central Excise v. Ashok Leyland Ltd. [1987 (29) E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... includible in the assessable value. In the second case of M/s. Ahmedabad Mfg. Calico Packing Co. Ltd. v. U.O.I. - 1982 (10) E.L.T. 821 (Guj.), the Gujarat High Court had undertaken a similar exercise. The ratio of these two judgments is not even remotely applicable to the belief of the Commissioner that after packing only, the lubricating oils became marketable. Before the Commissioner, three orders were cited to show that packing did not amount to manufacture. In the case of Indian Oil Corporation Ltd. v. C.C.E. [1987 (27) E.L.T. 482], the Tribunal had held that where the goods were cleared in bulk from the refinery and where they were later repacked and sold in packing, the valuation should be made in the form in which it was removed from the factory and that its subsequent repacking in containers was not a material aspect. The assessees had cited two other judgments also viz. in the case of EID Parry Ltd. v. U.O.I. [1978 (2) E.L.T. (J 18)] and Prabhat Packaging Corpn. [1990 (47) E.L.T. 102]. The ld. Commissioner overcame this hurdle by holding in para 44 as under : Therefore, what was done by the job worker was packing and not repacking . 20. In specific circumstances by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e basis for normal price for charging of duty under the existing circumstances. This is so as definition of place of removal as provided under Section 4(4)(b) of Central Excise Act has been amended on 28-9-1996 and inter alia which defines place of removal to include depots, premises of the consignment agents or any other place or premises from where the goods are sold. Removal of the goods from the premises of M/s. Savita Chemicals to the premises of packers cannot be treated as goods sold in the course of wholesale trade and further in view of the fact that higher price have been charged by M/s. Savita Chemicals for these goods from the depots after getting these repacked from M/s. Unique Packers. As the assessable value of the said goods i.e. Lube oil as per amended provisions of Section 4 of Central Excise Act, 1944, should be the invoice price charged at depot for the retail packs. Therefore, for the purpose of determining Central Excise duty under Rule 173F read with Rule 9(i) depot should be considered as a place of removal and duty should be determined accordingly as such they have contravened the provisions of Rule 9(i) read with Rule 173F by not determining the duty cor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... B. E. C. Circular No. 251/86/96-CX, dated 14-10-1996, as reproduced in 1996 (87) E.L.T. (T) 48. The extract read as under : In the Finance Act of 1996, definition of place of removal has been amended to include depot, consignment agents or any other place or premises from where the goods are sold by or on behalf of the assessee within its scope. However, time of removal for these other places of removal added in Section 4 shall be deemed to be the time at which such goods are cleared from the factory. The significance of these changes is that sale price at any of these places of removal will be the normal price for levy of excise duty and there can be different assessable values for the same excisable goods depending upon the place of removal. It also means that duty will be required to be paid at the time of clearance of goods from the factory for those goods which are sold by the manufacturer at depot, consignment agents or any other place etc. at a sale price of the place of removal i.e. depot, consignment agents etc. Where the goods are sold at the factory gate, there would be no problem. 27. This amendment has taken away the basis of the judgments which dictated th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e category of such goods (emphasis supplied). Similar goods, for example, goods of different brands manufactured by another assessee are also not such goods . Similar goods manufactured by another assessee are also not such goods : that may fall in the category of comparable goods . Even homogeneous goods e.g., sugar or cloth manufactured by different manufacturers would only be comparable goods and would not constitute such goods ." 30. Thus the grouping of the goods was to be as per brands or capacities. Goods falling in a particular group would become such goods as far as the other goods in the same category or group are concerned. When these goods are placed in juxtaposition with the goods from another group they would not remain such goods but would become comparable goods. 31. Following these guidelines, oil packed in containers of different sizes also would not become such goods in relation to each other but would become comparable goods. Continuing this logic further, the goods which are cleared in bulk cannot be even comparable goods, let alone by entitled to the term such goods . 32. Therefore, in the present case the attempt of the Commissioner to ap ..... X X X X Extracts X X X X X X X X Extracts X X X X
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