Exemption for bulk-dutiable goods extends to smaller packets when later packing does not alter the underlying product.

Ultramarine blue remained within the exemption under the 16 December 1991 notification where the product, falling under the relevant tariff sub-heading, had already suffered duty at the bulk stage. The court treated the petitioner's undisputed payment of duty on the bulk goods as sufficient to attract the exemption, and therefore found it unnecessary to decide whether subsequent packing into smaller packets constituted manufacture. The stated principle was that, where the factual process is unchanged and the legal position remains the same, the pre-notification and post-notification periods need not be treated differently. On that basis, the exemption was held to operate in favour of the petitioner.

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Issues: Whether ultramarine blue manufactured in bulk and then packed in small packets remained exempt from excise duty under the notification dated 16 December 1991, and whether such packing amounted to manufacture.

Analysis: The exemption notification covered ultramarine blue falling under the relevant tariff sub-heading, provided duty had already been paid on the bulk-manufactured product. The petitioner's case that duty had been paid on the bulk goods was not controverted. In these circumstances, the court found it unnecessary to decide the packing controversy further, as the exemption operated in favour of the petitioner. Reliance was also placed on the principle that where the factual process remains the same and the legal position is unchanged, the pre-notification and post-notification periods need not be treated differently.

Conclusion: The petition was allowed and the petitioner was held entitled to the relief claimed.

Ratio Decidendi: Where an exemption notification applies to the goods and the underlying duty on the bulk product has already been paid, subsequent packing of the same goods does not defeat the exemption merely because the goods are sold in a smaller form.

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