K.L. Rekhi, Member (T)

1. A common issue is involved in these seven appeals and they relate to the same appellants. They are, therefore, disposed of by this common order.

2. The dispute relates to Mineral Turpentine Oil removed in bulk on payment of duty from:

(i) Haldia Refinery; and

(ii) Mourigram Bonded Installation,

Both belonging to the appellants. A part of the production was stock transferred to Paharpur and Budge Budge filling stations after payment of duty. At these filling stations, the goods were packed in containers and sold to:

(1) Directorate General of Supplies and Disposal in the appellants' containers at Rate Contract Price which included the cost of the container; and

(2) Non-Directorate General of Supplies and Disposal parties in customer's containers.

The dispute before us relates to the goods sold as at (i) above.

3. The case of the department is that since all the four installations - Haldia Refinery, Mourigram Bonded warehouse, Paharpur Filling Station and Budge Budge Filling Station - belonged to the appellants, the packed sales to D.G.S.D., ex-Paharpur and Ex-Budge Budge should pay duty at the higher price relating to the packed goods. Since the packed goods had, at the time of stock transfer in bulk from Haldia and Mourigram, paid duty only at the bulk sale price, differential duty was demanded from the appellants. Further, on the charge that the appellants had suppressed their filling activity at Paharpur and Budge Budge, the Collector imposed penalty of Rs. 50,000/- on the appellants.

4. We have heard both sides and have carefully considered their submissions and the record. We observe that under the Central Excise Law the only two ways by which bulk goods cleared on payment of duty could be subjected to duty given again are:

(1) The subsequent activity on the goods should result in the emergence of a commercially new product, so as to attract a fresh charge under Section 3 of the Central Excises and Salt Act, 1944 on account of new goods having been "produced or manufactured".

OR

(2) The law should provide for charge of duty at the time and place of actual sale of the goods.

We find that neither of these two things happens in the present case. Ail that is done at Paharpur and Budge ' Budge is that the goods received in bulk are filled in containers. After such filling or packing, Mineral Turpentine Oil remains Mineral Turpentine Oil only. No new or different goods come into existence. Applying the ratio of the Supreme Court judgment in Delhi Cloth General Mills Company Limited case 1977 E.L.T. (J.199), reiterated in the more recent judgment of the Supreme Court in Empire Industries case MANU/SC/0186/1985 : 1985 (20) E.L.T. 179 (S.C.), it cannot be said that any manufacture or production had taken place at Paharpur and Budge Budge.

5. Though actually no new goods emerged after the process, the law could yet provide for the process of filling or packing to be deemed as manufacture. Such deeming provisions exist in Section 2(f) of the Act but they applied to manufactured tobacco, patent or proprietary medicines and cosmetics. They do not apply to Mineral Turpentine Oil. The process of filling or packing of duty paid Mineral Turpentine Oil at Paharpur or Budge Budge cannot, therefore, be treated even as deemed manufacture.

6. It is not possible either to say that the nature of the article was such that without filling or packing it was not at all marketable and it, therefore, became marketable goods only after filling or packing. This was because substantial quantities of Mineral Turpentine Oil are actually sold in bulk ex-Haldia and Ex-Mourigram Bonded Installation. The commodity is, therefore, marketable goods even in bulk condition.

7. The second alternative in paragraph 4' above is also not available since Section 4 of the Act requires the goods to be valued for purposes of assessment "at the time and place of removal" and not at the time and place of actual sale. "Place of removal" has been defined in Sect