1986 (11) TMI 185 - AT - Central Excise

Summary

Issues involved: Dispute regarding Mineral Turpentine Oil removed in bulk from Haldia Refinery and Mourigram Bonded Installation, duty payment, penalty imposition, deemed manufacture, valuation and assessment of goods, packing charges, suppression of facts.

Mineral Turpentine Oil Dispute: The dispute centered around whether duty should be imposed on Mineral Turpentine Oil sold after packing at Paharpur and Budge Budge, in addition to the duty already paid at the bulk sale price during stock transfer from Haldia and Mourigram. The department argued for a higher duty due to the filling activity at Paharpur and Budge Budge, alleging suppression by the appellants and imposing a penalty.

Manufacture and Assessment: The Tribunal observed that no new product emerged from the filling activity at Paharpur and Budge Budge, as Mineral Turpentine Oil remained the same. Referring to relevant Supreme Court judgments, it was concluded that no manufacture or production occurred at the filling stations. The law did not deem the filling process as manufacture for Mineral Turpentine Oil.

Valuation and Assessment: Valuation and assessment of goods were to be done at the time and place of removal, which in this case were Haldia Refinery and Mourigram warehouse. The goods were assessed at the bulk sale price from these locations, and any stock transfer to Paharpur and Budge Budge had to be valued similarly. The Tribunal highlighted the definition of "place of removal" under the Act and rules for proper valuation.

Packing Charges and Penalty: The department argued for adding packing charges to the quantity sold after packing at Paharpur and Budge Budge, citing Section 4(4)(d)(i) of the Act. However, the Tribunal found this provision inapplicable as the goods were in bulk condition at the time of removal from Haldia Refinery and Mourigram. The Tribunal ruled that the appellants were not guilty of suppression or misdeclaration, setting aside the demands for differential duty and the penalty imposed.

Judgment and Conclusion: The Tribunal allowed all seven appeals in favor of the appellants, stating that the filling or packing activity did not result in a new commercial product or additional duty liability. The appellants were not obligated to disclose the filling activity at Paharpur and Budge Budge, as it did not constitute manufacture or attract duty. The penalty and differential duty demands were deemed unjustified, and the appellants were granted consequential relief.