TMI Blog2019 (8) TMI 1173X X X X Extracts X X X X X X X X Extracts X X X X ..... t is also not clear whether any label has been fixed on the containers / barrels, if lubricants are sold to bulk / industrial users. There is no doubt that the Trade Mark has been obtained by the appellant for JEEZOL as lubricating oil and grease. The factual aspects have to be verified by the Department from the invoices, etc. - it is deemed appropriate to lay down the principles based on which the duty liability has to be determined after the aforesaid factual verification. Penalty u/r 25 of the Central Excise Rules, 2002 - scope of SCN - HELD THAT:- While the SCN proposes to impose a penalty under Rule 25 of the Central Excise Rules, 2002, no specific reasons has been given in the show-cause notice for this proposal - there is a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In relation to lubricating oils and lubricating preparations of heading 2710, labeling or re-labeling of containers or repacking from bulk packs to retail packs or the adoption of any other treatment to render the product marketable to the consumer shall amount to manufacture. Therefore, the processes of packing, repacking, labeling or relabeling or adoption of any other treatment to render the lubricating oils and lubricating preparations falling under Chapter Heading 2710 marketable to consumers amount to manufacture. A show-cause notice dated 5.7.2007 was issued to the appellants citing aforesaid Chapter Note and demanding Central Excise duty on the goods cleared by them for the period April 2006 to March 2007 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t s appeal and remanded the matter back to the Tribunal to examine the aforesaid note and consider the issue afresh and pass an order looking at the statutory provisions. Hence, these appeals before us. 3. Learned counsel for the appellant submits that it is true that Chapter Note 4 to Chapter 27 created a legal fiction in respect of lubricating oils and lubricating preparations falling under Chapter Heading 2710. In respect of such products, labeling, relabeling or repacking from bulk pack to retail packs or adoption of any other treatment to render the product marketable to the consumer shall amount to manufacture. However, he would urge that in their case they are not always selling the goods to the consumers in retail pac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relies on the CBEC Circular No.1024/12/2016-CX dated 11.4.2016 in which it has been clarified that this Chapter Note applies only to lubricating oils and lubricating preparations of Heading 2710. He would show us sample copies of their ER-1 returns to demonstrate that in their case, they have also cleared goods which fall under other Sub Headings and hence were not lubricants but the show-cause notice has taken their entire value of clearances and demanded Central Excise duty. To sum up, he would argue that they are not covered by the aforesaid Chapter Note except in cases where either lubricating oil or lubricant is cleared by them to consumers or they were cleared with labels to industrial users/bulk consumers/distributors. They are not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing. (c) Whether the appellant has sold these goods to only bulk and industrial consumers and consequently, whether any process has been undertaken by the appellant to render the product marketable to consumers. (d) Whether any products other than lubricants which were manufactured by the appellant and in which case, whether they are also covered by the Note 4 of Chapter 27. 6. From the records presented before us including the excise returns, it is not clear as to what extent the appellant has manufactured lubricants and other products as well. It is also not clear if the appellant had manufactured lubricants and whether these were marketable to consumers or whether the same has been sold in bul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duty is liable to be paid on such clearances even if labeling/ relabeling / repacking / any other treatment rendering the product marketable to consumer is undertaken. (ii) As far as the lubricants / lubricating oils are concerned, if these goods have been cleared after labeling or relabeling, the same amounts to manufacture regardless of whether the goods are sold to consumers or to bulk users in large barrels. As far as the lubricants / lubricating oils cleared in containers / packages suitable for consumers are concerned, they are covered by the Chapter Note 4, whether or not there was any labeling / relabeling of the containers, etc. This is because, undisputedly, the appellant is undertaking some processes to make the r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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