ORDER
Gowri Shankar, Member (T)
1. The applicant, M/s. Modipon Ltd., is a manufacturer of insecticides. It cleared by way of stock transfer after payment of duty, these goods in 50 kg pack to two job workers who in turn repacked it in retail smaller packs of 1 1/2 kgs. which the applicant sold. Notice was issued to the applicant, proposing to assess these goods on the value of the smaller packs on the ground that the applicant had done the repacking and it would have to pay duty on these packs. Adjudicating on the notice, the Commissioner has confirmed the demand of duty of Rs.2.91 crores approximately and imposed penalty on the company, and Rs.5 lakhs each on N.S.V. Ramani, M.Raman and A.G. Powar, employees of the company under rule 209A. These applications are for waiver of deposit of duty and penalty.
2. At the relevant time (March 1994 to July 1996) there was not provision in note 2 to Chapter 38 of the tariff holding that such repacking to bulk to retail would amount to manufacture. Such a note was introduced on 23rd July, 1996. The reason the Commissioner advance for his conclusion is that the two job workers were not independent and that the material for repacking was supplied by Modipon Ltd.
3. After hearing both sides we are prima facie not able to conclude that despite it is sufficient to sustain the Commissioner’s findings. It cannot be said that such repacking at the relevant time amounted to manufacture. It has not been demonstrated by the Commissioner that the two job workers had no independent existence. The facts are similar to the decision of the Tribunal in the case of Savita Chemicals Ltd. vs. CCE 2000 (119) ELT 394. In that decision the Tribunal had held that the assessable value of the oil which Savita Chemicals Ltd. cleared on stock transfer bulk which was repacked would be the value of the goods left to Savita Chemicals Ltd. was not the value of the cleared repacked goods.
4. Accordingly we waive deposit of the duty demanded and penalties imposed and stay their recovery.