In a medium sized mixing bowl, beat together the butter or margarine, cream cheese, salt, Baking powder, lemon peel, and lemon oil. When the mixture is soft, add the sugars, a bit at a time until evenly blended and fluffy. Finally, mix in the flour. Cover the bowl and refrigerate the mixture for 30 minutes.
Scoop out about 1 tablespoon of dough for each cookie, then roll the dough by hand into ½ - inch balls. Place the balls on an ungreased or parchment-lined cookie sheets, and flatten them to about 1/4 –inch thick and 1 ¾ to 2 inches in diameter.
Bake the cookies in a preheated 375° F for 10 to 12 minutes, or until they’re lightly browned on the bottom and edges.
While the cookies are baking, make the coating. Place the sugars in a food processor or blender and add the lemon oil. Process until well blended. Note: This can also be done with a bowl and a whisk, the food processor makes sure that the lemon oil is evenly blended with the sugars.
Allow the cookies to cool on the sheets for about 5 minutes, than dip them into the prepared sugar coating mixture. Place the cookies on a wire rack and let them cool completely. After they are completely cooled, shake more powdered sugar over them.