2007 (12) TMI 89

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....l Excise Act, 1944. With the insertion Note 5 in Chapter 38 of the First Schedule to the Central Excise Tariff Act by the Finance Act, 1997, this activity came to be deemed to be 'manufacture' for the purpose of levy of duty of excise, with effect from 1-3-1997 The appellants, however continued to clear the repacked oils to M/s. IOCL without payment of duty. This was detected by officers of the department in July, 1998. Three-and-a-half years later, the department is sued a show-cause notice dated 26-2-2002 invoking the extended period of limitation under the proviso to Section 11A(1) of the Central Excise Act demanding duty of excise on the repacked oils cleared by the appellants to M/s. IOCL from March, 1997 to January, 1998 and proposing....

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....te, the Commissioner, after hearing the party, passed the impugned order. The demand of duty was confirmed only to the extent of Rs.7,19,538/- and the amount of Rs.5,00,696/- already paid by the assessee was appropriated towards the same. A penalty of Rs. 7,19,538/- was also imposed on the party under Section 11AC. However, the proposal to penalize the IOCL functionary was dropped. 2. In the present appeal, there is no denial of duty liability on the repacked goods cleared by the assessee to M/s. IOCL during March,1997 to January, 1988. However, there is a serious challenge against the quantification of duty. Ld. Commissioner worked out the duty amount in terms of the formula laid down by the Apex Court in the case of Ujagar Prints etc. ....

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....tested on the ground of limitation. The appellants, admittedly, had no liability to pay duty of excise on the repacked goods prior to 1-3-1997 and, as a SSI unit they were not required to get registered with the department during such period. It was with the introduction of Chapter Note 5 ibid that the activity of repacking of the subject goods came to be deemed to be "manufacture" and, consequently, to be excisable. It is said that this change of law was not known to the appellants till they were told of the same by officers of Central Excise in July, 1998. Thereafter, the appellants worked out the duty amount for the period from March, 97 to January, 1998 in their own way and paid the same. It appears, this was within seven months from....