TMI Blog2005 (11) TMI 73X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal has not considered the argument of the appellants that they were not guilty of suppression as the law was amended vide Finance Bill, 1994, when the activity of "repacking" was treated as "manufacture" for the first time. In our view, these questions were required to be decided by the Tribunal in the present case, particularly, in the light of the provisions of Section 4(4)(d)(i) of the said Act. They have not been decided by the Tribunal. Civil appeal filed by the assessees is allowed, the impugned judgment of the Tribunal is set aside and the matter is remitted to the Tribunal for its fresh decision. - 3844 of 2000 - - - Dated:- 28-11-2005 - Ashok Bhan and S.H. Kapadia, JJ. [Judgment per : S.H. Kapadia, J.]. - This is a statutory appeal under Section 35-L(b) of the Central Excise Act, 1944 (hereinafter referred to as "the said Act") against the judgment and order dated 19-6-2000 passed by the Customs, Excise Gold (Control) Appellate Tribunal, New Delhi ("Tribunal" for short). 2.A short question which arises for determination in this civil appeal is - whether, on the facts and circumstances of this case, cost of repacking of detergent powder into 20 gms. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the department invoked the extended period of limitation in terms of the proviso to Section 11A(1) of the said Act. 4.In its reply to the show cause notice, the appellants denied that the IED, Kanpur was the extended arm of the appellants. According to the appellants, effective from January 1993, they had started clearing AMS in 25 kgs. bulk packs, on payment of duty to IED, Kanpur for repacking into 20 gms. and 30 gms. sachets; that, the repacking in sachets was undertaken by IED on job work basis; that, such repacking was not a manufacturing activity under the said Act and consequently, no duty was payable by IED on the repacking of AMS 25 kgs. packs into 20 gms. and 30 gms. sachets till 1-3-1994, when Chapter Note 6 was introduced in Chapter 34 making such repacking activity a "manufacture" in terms of Section 2(f) of the said Act. After 1-3-1994, IED had applied and obtained registration under the Act. They are since then paying duty on 20 gms. and 30 gms. sachets repacked by them. In their reply, the appellants further pointed out that prior to the period in question, IED used to manufacture AMS; and that, vide letter dated 26-11-1992, IED had informed the Assistant Collecto ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... D was an extended arm of the appellants, the department was not entitled to demand differential duty because "repacking" did not constitute "manufacture" and since "repacking" did not amount to "manufacture" at the relevant time, the department had erred in demanding differential duty on the price of the sachets. According to the appellants, since the clearance at the factory gate at Mandideep was not by way of sale, the appellants were entitled to value the bulk packs on the basis of costing under Rule 6(b) of the Valuation Rules, 1975. According to the appellants, the impugned demand was not legally sustainable because the department had demanded duty on the price at which the retail packs were sold. Lastly, they contended that the impugned show cause notice has proceeded on the basis that the detergent powder cleared in bulk packs and subsequently repacked into sachets and sold at a higher price in wholesale resulted in loss of revenue. However, vide Finance Bill, 1994, which was not retrospective, Note 6 was added in Chapter 34 of the Schedule to the 1985 Act, by which repacking amounted to "manufacture" and, therefore, there was no suppression on the part of the assessees, as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stated, Mr. V. Lakshmikumaran, learned Counsel for the appellants submitted that the show cause notice did not contain allegations regarding valuation of 25 kgs. bulk packs; and that, the said notice had worked out the demand only on the basis of the price of 20 gms. and 30 gms. sachets. Before us, the learned Counsel did not challenge the concurrent finding of fact, namely, that the IED was the extended arm of the appellants. Learned Counsel however submitted that even according to the department at the relevant time, repacking did not constitute "manufacture" and, therefore, the demand for differential duty only on the basis of the price of the sachets was untenable in law. Learned Counsel also contended that the value of the 25 kgs. bulk packs was approved by the department as declared in the price list for captive consumption and, therefore, there was no question of suppression on the part of the appellants. Learned Counsel further submitted that the price list filed by the appellants was prepared on the basis of costing because the clearance of 25 kgs. bulk packs was for captive consumption and not for sale and, consequently, the concept of "normal price" was not applicable i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ful suppression on the part of the appellants under the proviso to Section 11A(1). Learned Counsel submitted that in the present case, the Commissioner has categorically recorded a finding of fact to the effect that the appellants had suppressed the true price of AMS in the condition it was removed after packing in sachets. He submitted that even on valuation, the Commissioner has recorded a finding that the appellants were required to pay duty on the assessable value of 20 gms. and 30 gms. sachets supplied by the IED to the depots of the appellants. Learned Counsel submitted that this finding on valuation has been accepted by the Tribunal and, therefore, no interference was called for in the present case. 9.This case relates to valuation. At the outset, we would like to clarify certain concepts under the Excise Law. The levy of excise duty is on the "manufacture" of goods. The excisable event is the manufacture. The levy is on the manufacture. The measure or the yardstick for computing the levy is the "normal price" under Section 4(1)(a) of the Act. The concept of "excisability" is different from the concept of "valuation". In the present case, as stated above, we are concerned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the sachets were taken to the depots of the appellants and cleared at the price list indicated in the show cause notice. According to the Commissioner, the appellants had suppressed the true price of AMS in the condition in which it was removed after packing in 20 gms. and 30 gms. sachets. Therefore, the Commissioner took the price of the sachets at the depots of the appellants as the basis for computing the assessable value of AMS cleared by the appellants in 25 kgs. bulk packs at Mandideep, Bhopal. 12.Unfortunately, when the matter came before the Tribunal in the appeal preferred by the assessees, the Tribunal has not adverted to the valuation of the bulk packs cleared by the appellants at Mandideep, Bhopal. Before the Tribunal, the appellants contended that the department had cleared the bulk packs on payment of duty by the appellants. According to the appellants, the activity of "repacking" did not amount to "manufacture" at the relevant time and if the said activity did not amount to manufacture, the department was not entitled to compute the assessable value of the bulk packs based on the retail price of 20 gms. and 30 gms. sachets. The appellants contended that even if IE ..... X X X X Extracts X X X X X X X X Extracts X X X X
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