1992 (5) TMI 101 - AT - Central Excise

Summary

Issues:
1. Whether duty is chargeable on goods re-sold after re-packing into smaller containers.
2. Whether a demand issued after the expiry of six months from the date of payment of duty can be confirmed without alleging suppression or misstatement of facts.

Analysis:

Issue 1:
The appellants, engaged in paint manufacturing, classified their products under specific tariff items. The dispute arose when duty was demanded on goods re-sold after being repacked into smaller containers. The Assistant Collector and the Collector of Central Excise upheld the demand, stating that duty should be levied based on the price of the smaller packings. However, the appellants argued that duty should be charged based on the price at which the goods were sold in bulk packing. They relied on a decision regarding valuation at the time of removal and not at a future date post-repacking. The Revenue contended that duty should be on the price after repacking. The Tribunal referred to past cases where goods in bulk were not charged differently post-repacking, concluding that duty should be based on the original bulk price. Therefore, the Tribunal ruled in favor of the appellants on this issue.

Issue 2:
Regarding the demand issued after six months without alleging suppression or misstatement of facts, the appellants argued that the demand was time-barred. They cited a Supreme Court decision to support their contention. The Revenue asserted that the extended period for recovery was correctly invoked due to the circumstances outlined in the Show Cause Notice. The Tribunal did not delve into this issue as the appellants succeeded on the first point. Consequently, the appeal was allowed in favor of the appellants with consequential relief.

This judgment clarifies the valuation of goods for excise duty purposes and the time limit for issuing demands without allegations of suppression or misstatement of facts. The decision emphasizes that duty is to be levied based on the original bulk price of goods, even if they are repacked into smaller containers post-clearance.