Stay Application Granted: Duty & Penalty Waived Pending Appeal. Repacking Not Manufacturing.

The Tribunal granted the Stay Application, waiving and staying the recovery of disputed duty and penalty amounts until the appeal hearing. The appellant successfully argued that the repacking of detergent powder did not amount to manufacture at the material time, distinguishing it from previous cases cited by the Departmental Representative. The Tribunal found that the repacking activity, which occurred after duty payment at the factory, did not enhance the value of goods significantly, leading to the decision in favor of the appellant.

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Issues:
1. Stay petition seeking waiver of pre-deposit of duty and penalty amounts.
2. Jurisdictional dispute regarding repacking of detergent powder.
3. Interpretation of Chapter Note under Chapter 34 of Central Excise Tariff.
4. Applicability of Tribunal decisions on assessable value of goods.

Analysis:
1. The Stay Petition was filed to waive the pre-deposit of duty and penalty amounts demanded by the Commissioner of Central Excise, Indore. The appellant, represented by Senior Advocate Shri A. Hidayatullah, argued that the demand of duty on repacked detergent powder was without jurisdiction. The Commissioner of Kanpur had previously dropped proceedings on similar repacking activities, stating it did not amount to manufacture at the time. The appellant sought waiver based on a strong prima facie case.

2. The Departmental Representative opposed the plea, arguing that the repacking in Kanpur was done by the appellant themselves, making it an excisable product. The duty was levied at the repacked stage, considering it as part of the manufacturing process. The DR cited Tribunal decisions to support this stance, emphasizing the assessable value of goods post additional processes. However, the Tribunal found that the repacking in this case did not amount to manufacture at the material time, distinguishing it from the cases cited.

3. The Tribunal examined the submissions and noted that the repacking of detergent powder in smaller sachets was done after the duty was paid at the Mandideep factory. The introduction of a new Chapter Note under Chapter 34 made repacking a manufacturing activity, but the Kanpur factory had complied post this change. The Tribunal differentiated this case from previous decisions where additional processes enhanced the value of goods, stating that the repacking here did not fall under that category.

4. The Tribunal concluded that the Tribunal decisions cited by the DR were not directly relevant to the current case, where goods were cleared from one factory and repacked in another without constituting manufacture at the time. Consequently, the Tribunal granted the waiver of pre-deposit of disputed duty and penalty amounts for the appeal hearing, staying the recovery until the appeal's disposal.

In summary, the Tribunal allowed the Stay Application, granting the waiver and stay of recovery for the disputed duty and penalty amounts pending the appeal hearing.

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