TMI Blog2001 (4) TMI 500X X X X Extracts X X X X X X X X Extracts X X X X ..... for demanding duty for the period from 1-9-1995 to 31-10-1995 and 1-11-1995 to 31-1-1996 respectively on the ground that the price at which small packages were sold by them from Depot should be adopted for the purpose of charging duty: that the Assistant Commissioner, under Adjudication Order No. 21/96, dated 18-6-1996, confirmed the demand of duty of excise amounting to Rs. 51,24,716.90p., holding that the pesticides are generally sold in packings of 50 ml, 100 ml, 500 ml, 1 ltr. 50 ltr and the cost of this packing is includible in the assessable value of the goods as per judgments of the Supreme Court in UOI v. Bombay Tyre International Ltd., 1983 (14) E.L.T. 1896 (S.C.) and MRF Ltd., 1995 (77) E.L.T. 433 (S.C.); that a wholesale price at the depot is very much available; that the argument that the goods could be marketed in bulk is only theoretical as the goods are marketed only in small packs. He relied upon the decision in Hindustan Polymers v. C.C.E., 1989 (43) E.L.T. 165 (S.C.). The Assistant Commissioner also rejected the contention of the Appellants that goods in bulk form were not the same those in small packs holding that by packing no new products emerge with a distin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Act as per the decision in C.C.E. v. Ponds India Ltd. - 1989 (44) E.L.T. 185 (S.C.). Finally the learned DR relied upon the decision in Sidhartha Tubes Ltd. v. C.C.E., 2000 (115) E.L.T. 32 (S.C.) wherein it was held that when the assessable value is to be calculated of the galvanised black pipe made by the appellants, the element of the cost of galvanisation must form a part thereof . 4. On the other hand, Shri R. Raghavan, learned Advocate, submitted that the pesticides are being marketed in bulk quantities and market exists in bulk quantities for pesticides; that repacking of pesticides does not amount to manufacture; that the repacked pesticides had not been brought back to the factory at Ennanore and these had been sold from Velachery and Ambattur; that value has to be determined for the goods in the form in which they are cleared from the factory and as there is an admission that goods are cleared in bulk, the value has to be determined only for bulk goods; that as there is no sale of impugned goods at the factory gate, the determination of value under Section 4(1)(b) of the Act read with Rule 6(b)(ii) and Rule 7 of the Valuation Rules is in order. The learned Advocat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers are cleared to the Repacking units of the Appellants and after repacking in small packs, these are sold in wholesale. It is also not disputed fact that repacking into smaller packs does not amount to manufacture. In view of these facts it is apparent that there is no factory gate price available for pesticides either in 200 ltr packings or in smaller packings. Accordingly, the ratio of the decision in the case of Indian Oil Corporation Ltd., supra, is not applicable as in that case the goods were sold in bulk from factory and normal price was ascertainable at the factory gate which is not so in the present matter. Similar is the position in the case of Savita Chemicals Ltd., supra, as the automotive Oil manufactured by them were sold in bulk in tankers to buyers at the factory gate. The other differential factor in Savita Chemical s case is that the bulk oil was sent to M/s. Unique Packers, a third party, and not to the Repacking units of the manufacturer as is the case in the present matter. In view of these facts the Tribunal held in Savita Chemicals that factory gate price, being available in respect of oil sold in bulk, has to be adopted. The goods are ordinarily sold by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts have to pay excise duty on the value of the goods at which these are sold in small packs. We, thus, set aside the impugned order and allow both the appeals filed by the Revenue. It has been mentioned by the Respondents in cross objection that demand is time barred without mentioning any basis for the same. We, however, find that show cause notices were issued on 5-3-1996 and 12-3-1996 demanding duty for the period 1-9-1995 to 31-1-1996 which are within the period of six months specified in Section 11A(1) of the Central Excise Act. Accordingly, the cross objection filed by the Respondents is also rejected. Sd/- (V.K. Agrawal) Member (T) 8. [Contra per : S.L. Peeran, Member (J)]. - I have carefully considered the findings recorded by the Learned brother in this order. While agreeing with the proposition of law laid down by the Learned brother in his findings, we are required to examine the facts of the present case for application of the said proposition of law. Respondents although succeeded before the Commissioner, however, were dissatisfied with the some of the findings recorded in the order on fact and have seriously challenged the same. The said challenge in cross appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of packing charges in terms of Section 4(4)(d)(i) of CESA 44. The question was whether the value claimed under Section 4(1)(b) of CESA 44 was correct or not. They submit that they had always included the cost of containers in which the bulk pesticides were being cleared in determining the value for the said bulk quantities. They contend that there was nothing in the impugned order of AC to suggest that the cost of packing was not included in the value declared and there was no such allegation in the SCN. It is their case that repacking cannot constitute manufacture unless specifically deemed to be so in terms of CESA or CET Act with particular reference to the goods in question. They contend that they have evidence to show that the goods namely pesticides were marketed in bulk. When pesticides in bulk is a marketable commodity and being so marketed, they contend that it is obligatory in terms of Section 3 of CESA 44 read with Rule 9 of CER 44 to determine value under Section 4(1)(b) of CESA 44 for the purpose of payment of duty when Pesticides are removed in bulk from their factory. Therefore, they challenged the AC s view that depot price has to be adopted as value for rem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case are that pesticides in bulk are not sold at the factory gate. On a perusal of the grounds of appeal made before the Commissioner annexed in cross appeal and grounds made in appeal, assessees have not disputed this fact and have stated that there is a factory gate sales for the bulk pesticides and repacked material did not come to the factory. If this be the position, then we are required to examine the case-law cited above and in case if this fact is available on record then we have to proceed on the valuation to be adopted at the value available at the factory gate. In case if the same is not available then the contention of the respondents that Section 4(1)(b) is required to be considered is also sustainable and thereafter in the absence of applicability of Section 4(1)(b), we have to adopt the procedure laid down for valuation in terms of Valuation Rules and deductions have to be granted accordingly. We cannot go straightaway to adopt the depot price, which, in my humble opinion, is not correct, if in case respondents can show that there is a factory gate sale for the bulk material during the relevant period, as this point has been seriously contested and the Commissioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r (J) should be upheld. He also submitted that there were no sales at the factory gate. 15. After hearing both the sides and considering the matter, I find that : (a) Facts of this case need not be repeated as they have been recorded in the two orders of the learned Member (T) and learned Member (J) which I had the privilege of having gone through. However, I find from learned Member (J) s order that he has come to a finding after considering the cross objection that there was sale at the factory gate bulk pack i.e. packing of 200 kgs. or above. The learned Counsel for the respondents also submitted that earlier i.e. for the period about a year or two, before the controversy in the present case arose, there was factory gate sale of pesticides in 200 kgs drums from the factory gate. He fairly conceded that the price available at the factory gate for the 200 kgs drums should not be applied in the facts of this case as provided for under Rule 4 of the Valuation rules since the nearest time cannot be taken to be two years retrospective. I also find that I cannot apply Rules 4, 5 and 6(b)(I) of the Valuation Rules. I find that Rule 6(b)(ii) of the Valuation Rules reads as under ..... X X X X Extracts X X X X X X X X Extracts X X X X
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