Kapadia, J. - (1.) This is a statutory appeal under section 35-L (b) of the Central Excise Act, 1944 (hereinafter referred to as "the said Act") against the judgment and order dated 19-6-2000 passed by the Customs, Excise and Gold (Control) Appellate Tribunal, New Delhi ("tibunal" for short).
(2.) A short question which arises for determination in this civil appeal is - whether, on the facts and circumstances of this case, cost of repacking of detergent powder into 20 gms. and 30 gms. sachets, which did not amount to manufacture at the relevant time, was includible in the assessable value of "ariel micro-system" (AMS) cleared by Procter and Gamble ("assessees" for short") in bulk packs of 25 kgs. at its factory gate of Mandideep, Bhopal.
(3.) Assessees-appellants are engaged in the manufacture of detergent powder (AMS) falling under Chapter 34 of the schedule to the Central Excise Tariff Act, 1985 (for short "the 1985 Act") at their factory at Mandideep, Bhopal within the jurisdiction of the Commissioner of Central Excise, Indore. On 8/10-6-1994, a show-cause notice was issued by the Collector in which it was alleged that during the period December, 1992 to December, 1993, the appellants had removed AMS in bulk packs of 25 kgs. for further repacking in 20 gms. and 30 gms. sachets by M/s. Industrial Enterprises (Detergent, Kanpur ("IED" for short; that, the said IED was an extended arm of appellants; that, the appellants had cleared 25 kgs. bulk packs of AMS on pricing, based on the cost method, and thereby did not pay the appropriate amount of duty on AMS in the condition in which it emerged after repacking by IED, Kanpur; that, the appellants did not pay duty on the prices of the sachets; that, the appellants had failed to disclose to the department the particulars of the agreement with IED for the repacking of the detergent powder (AMS; that, the appellants had removed the AMS in 25 kgs. packs with the sole intention of getting it packed in 20 gms. and 30 gms. sachets by IED Kanpur; that, the entire modus operandi on the part of the appellants was to deliberately declare only the cost of 25 kgs. bulk packs for payment of excise duty; and, consequently, there was suppression of the true price of AMS in the condition in which it was removed after packing in the sachets of the above dimensions. In the show-cause notice, it was further alleged that the appellants had wilfully suppressed the facts; that the 20 gms. sachets in blue and green colours were sold through the depots of the appellants at a price of Rs.2.50 and Rs.2.00 per piece. That the said sachets were supplied by IED to the appellants, who in turn sold the same through their depots. Consequently, the department issued the above show-cause notice as to why differential duty of Rs.1,10,40,613/- should not be levied on the appellants. By the said show-cause notice, the department invoked the extended period of limitation in terms of the proviso to section 11 A(1) of the said Act.;