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3. These 200 litre bulk packs (unbranded) sent to the re-packers under stock transfer invoices and their eventual repacking into different sized packs were declared to the Department and this activity was considered to be not amounting to manufacture. For the ultimate pack sizes for the repacked goods, which were sold at the respective depots, sale value was declared. They were issued with Show Cause Notices on the ground that paint in 200 litre container was not sold at the factory gate, but was sold only after repacking, from the depots and duty was demanded on the enhanced value adopted for the sale of such repacked goods, as such repacking and branding had made the goods marketable to the retailed consumer and when such goods were sold through the regional sale depots/sale office. As Value of such goods could not be determined at the time and place of removal, then valuation was to be resorted to on the basis of Section 4(1)(b) of the Central Excise Act, 1944. The value of repacked goods cleared as per the delivery challans worked out to a price per litre equal to that of which the appellants had cleared the goods to the repacking godown. The cost of repacking charges and cost of packing materials was not added to the value of the repacked goods. It was held that the appellants have arranged the misdeclaring of these packages and the repacked value was higher than that declared to the Department. The assessees were alleged to have had prior information about repacks i.e. before removal of such 200 litres pack of paints. They were also alleged to have prior information about shortage/ availability of the pack sizes at the depots as they had to arrange tin containers for smaller packs manufactured and supplied to the re-packers. In this view it was viewed that every time a 200 litre of paint left the factory, it was already known how many smaller packs of that were going to be made and the as-sessee knew the price per litre at which the goods were finally to be sold at the depot, prior to the removal from the factory.

As regards the demand of interest under Section 11AB, the same is payable by the appellants in respect of the clearances effected on or after 28-9-96 and is not payable in respect of the clearances effected prior to 28-9-96 in view of the well settled legal position."

and disposed of the appeal. Hence, the present appeal.

5. We have heard both sides and considered the matter and find: -

(a) It is well settled law that goods should be assessed in the form in which they are cleared from the factory and not the form or container, in which they are sold from the depot, after the repacking is done by the job workers when such repacking does not amount to manufacture.
(b) No mention of the relevant chapter notes has been shown to us to constitute repacking as manufacture in the case of paints. Admittedly, the goods are paints when being removed from the factory gate and will have to be assessed as such. The allegation made that they become marketable or ready for sale only when repacked in smaller containers would imply that a 200 litre container of paint is not marketable and thus it would not be exigible. The exigibility of the 200 litre pack is not in question before us. Therefore this reasoning does not enthuse us to alter the view held that goods have to be assessed as cleared.