2015 (10) TMI 2585 - AT - Central Excise

Manufacture - Acetic Anhydride - hazardous chemical - The repacking of the said goods from the bulk packs, to retail packs - Held that - we hold that the appellant is not engaged in repacking from bulk packs to retail packs. Neither the appellant is packing the goods in retail packs and neither adopting any of the treatment to retail sale to the consumer. As such, we hold that the provisions of Note 11 of Chapter 29 of CETA, 1985, are not attracted. we also hold that under the facts and circumstances, there is no concealment of facts, contumacious conduct et cetera on the part of the appellants and as such extended period of limitation is not attracted in this case. Accordingly, the impugned orders are set aside - appeal allowed - decided in favor of appellant-assessee.

Summary

Issues:
1. Whether the appellants engaged in repacking from bulk packs to retail packs amounting to manufacture?
2. Whether the appellants are liable to pay Central Excise duty and penalties for repacking activities?
3. Whether the labeling of products by the appellants renders them marketable to consumers?
4. Whether the appellants are entitled to consequential benefits based on the Tribunal's ruling?

Issue 1: Repacking Activities
The appellants, engaged in distributing hazardous chemicals, received chemicals in bulk and transferred them to smaller containers at their premises before dispatch. The Revenue alleged that this repacking constituted manufacturing, requiring Central Excise duty payment. However, the appellants argued that their activities did not amount to repacking from bulk to retail packs, as they sold to manufacturers, not consumers. They contended that labeling the containers did not make the products marketable to consumers, citing legal definitions and precedents.

Issue 2: Liability for Central Excise Duty
The Revenue issued show cause notices demanding Central Excise duty and penalties for the alleged repacking activities. The appellants contested these notices, arguing that their actions did not constitute manufacturing under the relevant laws. They relied on legal precedents, including a Supreme Court ruling, to support their position. The Tribunal considered these arguments and ruled that the appellants were not engaged in repacking for retail sale, thus not liable for duty or penalties.

Issue 3: Marketability of Products
The appellants maintained that their labeling activities did not make the products marketable to consumers, as they were selling to industrial consumers, not end-users. They cited legal definitions and case law to support their position. The Tribunal, after considering the arguments and legal precedents, agreed with the appellants, ruling that the labeling activities did not render the products marketable to consumers.

Issue 4: Consequential Benefits
Based on the Tribunal's findings that the appellants were not liable for Central Excise duty or penalties, the impugned orders were set aside. The Tribunal held that there was no concealment of facts or contumacious conduct by the appellants, and the extended period of limitation was not applicable. Consequently, the appellants were entitled to consequential benefits in accordance with the law.

In conclusion, the Tribunal ruled in favor of the appellants, holding that their activities did not amount to repacking for retail sale, and they were not liable for Central Excise duty or penalties. The appellants were granted consequential benefits, and the impugned orders were set aside.