COMMISSIONER OF C. EX. Vs. MEENAKSHI AND CO.

JUDGEMENT

(1.) IN this appeal of the Revenue, the short question which arises for consideration is whether the goods (leather chemicals) removed by the respondents, in the form in which they did, during the period 1 -3 -97 to 10 -12 -98 were dutiable. The original authority demanded duty of Rs. 1,91,035/ - from the party and imposed on them penalties. The first appellate authority found that the party was only pouring the chemicals from bulk container into small containers at the time of sale and that such activity did not amount to 'manufacture' in terms of Note 6 to Chapter 34 of CETA Schedule. Accordingly, the demand of duty and penalties were set aside. The present appeal is against the decision of learned Commissioner (Appeals).

(2.) AFTER examining the records and hearing both sides, we find that the appellant relies on the above Chapter Note to hold that the above activity of the respondents amounted to 'repacking' of bulk pack into retail packs of leather chemical amounting to "manufacture" within the meaning of this expression under Section 2(f) of the Central Excise Act. It appears from the records that the party had explained their activity to the original authority, by submitting that most of the goods received in bulk containers from M/s. Balmer Lawrie and Co. Ltd. were sold as such and that the remaining quantity so received from the said company was disposed of by way of retail sale to small scale consumers, who often brought their own containers for purchasing the chemical. They submitted that the chemical from the bulk container was poured into the small containers brought by customers, in their presence and that no readymade retail packs of the chemical were kept for sale. It appears that this account of the activity of the respondents has not been disputed by the appellant. The appellant does not have even a case that the issue was wrongly framed by learned Commissioner (Appeals). We find that learned Commissioner (Appeals) framed the issue which arose for his consideration, as under: Whether pouring of chemicals from bulk to small containers amounts to manufacture or not As the issue as framed by the Commissioner (Appeals) has been accepted as such by the appellant, we do not think that it is necessary to have an extended discussion on the subject inasmuch as the activity of the respondents is clearly inbuilt in the issue framed by Id. Commissioner (Appeals). We also find that mere pouring of chemicals from bulk to small containers is not an activity attracting the above Chapter Note. In order to attract the Chapter Note, goods in bulk container should be "repacked" in small containers, whereby the goods becomes a marketable product. Thus the Chapter Note presupposes retail packs of the goods being readied for removal. Pouring of the chemical from a big container into a smaller one instantly when required by customer can, by no stretch of imagination be considered to be in the nature of 'repacking' of bulk to retail packs. It also needs mention that repacking of a bulk quantity, say 100 Kgs., into retail packs of smaller quantities, say 5 Kgs., should necessarily result in the formation of a definite number of retail packs, say 20. Spasmodic removal of small quantities from a bulk quantity of chemical occasioned by an offer of purchase by a customer would not give rise to such a situation. We, therefore, endorse the view taken by Id. Commissioner (Appeals) and dismiss this appeal.