1984 (9) TMI 282 - AT - Central Excise

Summary

Issues Involved:
1. Stage of duty levy on goods.
2. Value at which duty was leviable.
3. Possibility of duty being levied a second time.
4. Basis for duty if levied a second time.

Detailed Analysis:

Issue 1: Stage of Duty Levy on Goods
The appellants contended that duty was leviable at the stage of clearance from the premises of Balmer Lawrie. Balmer Lawrie was issued a manufacturer's license, submitted price lists and classification lists, paid duty, and maintained a Personal Ledger Account. The excise authorities treated Balmer Lawrie as the manufacturer, licensing them and approving their price lists. The Appellate Collector observed that the value at which duty had to be paid was on the goods manufactured by Balmer Lawrie. The Tribunal agreed that duty was payable at the time of removal from Balmer Lawrie's premises, as the goods were fully finished and covered by Item 11B of the Central Excise Tariff Schedule.

Issue 2: Value at Which Duty Was Leviable
The appellants argued that the Government of India had fixed the sale prices of the compounded greases, including packing, and these prices were applicable irrespective of the seller. The Tribunal agreed, stating that the prices fixed by the Government for such goods in their respective packings were the assessable values.

Issue 3: Possibility of Duty Being Levied a Second Time
The appellants contended that once duty had been paid, no further taxable event occurred. The Tribunal noted that the repacking of goods was not a process of manufacture, as conceded by the Department and supported by various judicial decisions, including the Supreme Court judgment in Union of India v. Delhi Cloth and General Mills. The Tribunal held that the goods did not undergo any process that would render them liable to further duty under the same tariff item.

Issue 4: Basis for Duty if Levied a Second Time
Given the Tribunal's decision on the third issue, the question of whether further duty would be leviable on the full value or the differential value did not arise.

Conclusion
The Tribunal upheld the appellants' contention that the goods were assessable to duty at the time of removal from Balmer Lawrie's factory and at the prices fixed by the Government of India. The appeals were allowed, and consequential relief was directed.

Summary:
The Tribunal ruled that excise duty on compounded lubricating oils and greases was leviable at the stage of removal from Balmer Lawrie's factory, based on prices fixed by the Government of India. Repacking by Hindustan Petroleum did not constitute a manufacturing process that would attract additional duty. The appeals were allowed, providing consequential relief to the appellants.