2002 (6) TMI 213 - AT - Central Excise

Summary

Issues Involved:
1. Whether the air-conditioning ducts fabricated at the project site are excisable.
2. Whether M/s. Voltas Ltd. or M/s. Syed Hussain & Sons is the manufacturer of the ducts.
3. Applicability of previous Tribunal decisions to the present case.
4. Limitation aspect in the context of the demand for duty.

Issue-wise Detailed Analysis:

1. Excisability of Air-Conditioning Ducts:
The Tribunal noted that the issue of whether the air-conditioning ducts that come into existence are excisable was covered against the appellant by the Tribunal's decision in the case of Blue Star [1999 (107) E.L.T. 609]. Consequently, this issue was not contested by the appellant.

2. Manufacturer of the Ducts:
The core issue was whether M/s. Voltas Ltd. or M/s. Syed Hussain & Sons should be considered the manufacturer of the ducts. The appellant argued that M/s. Syed Hussain & Sons, who were subcontracted to fabricate the ducts, should be considered the manufacturer. They cited previous Tribunal decisions in their favor, particularly Final Order No. 1513/1996 and Final Order No. 1301/2001, which established that the relationship between Voltas and Syed Hussain was on a principal-to-principal basis, not a labour contract.

The Revenue contended that the facts of the present case differed from the earlier cases, arguing that M/s. Syed Hussain & Sons acted as hired labourers using materials and machinery provided by M/s. Voltas Ltd. The Revenue relied on the Tribunal's decision in Maruti Udyog Ltd. [2001 (134) E.L.T. 188], where similar circumstances led to the principal company being considered the manufacturer.

Upon reviewing the evidence and contractual terms, the Tribunal found that the contract between M/s. Voltas Ltd. and M/s. Syed Hussain & Sons was not a mere labour contract but a comprehensive contract involving various terms and conditions, including penalties for delays and payments for specific items. The Tribunal concluded that M/s. Syed Hussain & Sons were not hired labourers but independent contractors who fabricated the ducts, thus holding M/s. Syed Hussain & Sons as the manufacturer.

3. Applicability of Previous Tribunal Decisions:
The Tribunal examined whether the previous decisions in the appellant's favor applied to the present case. The Tribunal found that despite differences in contracts, the nature of the relationship between M/s. Voltas Ltd. and M/s. Syed Hussain & Sons remained consistent with the principal-to-principal basis established in earlier decisions. Therefore, the Tribunal held that the previous decisions were applicable.

4. Limitation Aspect:
Given that the issue on merits was decided in favor of M/s. Voltas Ltd., the Tribunal did not find it necessary to examine the limitation aspect regarding the demand for duty.

Conclusion:
The appeal filed by M/s. Voltas Ltd. was allowed. The Tribunal held that M/s. Syed Hussain & Sons, not M/s. Voltas Ltd., were the manufacturers of the ducts, and thus, M/s. Voltas Ltd. was not liable for the excise duty and penalty imposed by the Collector of Central Excise, Guntur.