2007 (1) TMI 323 - AT - Central Excise

Summary

Issues:
Revenue's appeal against the order-in-appeal claiming respondents are not manufacturers of computers but traders. Whether small scale exemption available for computers under heading 8471 of Central Excise Tariff.

Analysis:
The case involved an appeal by the Revenue against the order-in-appeal passed by the Commissioner (Appeals) regarding the manufacturing status of the respondents and the applicability of the small scale exemption for computers under heading 8471 of the Central Excise Tariff. The respondents contended from the outset that they were solely engaged in trading computers and parts, not in manufacturing. They presented purchase and selling bills, along with a recovery memo from a search, demonstrating their trading activities in computers and peripherals. The Commissioner (Appeals) reviewed this evidence and concluded that the respondents were indeed dealers of computers and peripherals, selling them in the same condition as received from the original manufacturer. This finding, unchallenged in the appeal, led to the dismissal of the Revenue's appeal. The judgment highlighted that the respondents' trading activities were well-supported by the evidence presented, and as such, the appeal lacked merit.

The key contention of the Revenue was that the respondents failed to produce purchase bills for computers before the lower authorities, indicating that they were not manufacturers but traders. However, the respondents effectively countered this argument by providing invoices and bills demonstrating their trading activities in computers and peripherals. The recovery memo from a search further supported their position as dealers selling products received in packed condition from the original manufacturer. The Commissioner (Appeals) upheld this evidence, emphasizing that the respondents' activities aligned with those of dealers, not manufacturers. This crucial finding, which remained unchallenged in the appeal, formed the basis for dismissing the Revenue's claim and upholding the original order-in-appeal.

Regarding the availability of the small scale exemption for computers falling under heading 8471 of the Central Excise Tariff, the judgment did not delve into this issue extensively due to the conclusive finding that the respondents were engaged in trading, not manufacturing. Since the primary dispute revolved around the nature of the respondents' business activities, the judgment did not address the small scale exemption issue separately. The dismissal of the appeal based on the established trading status of the respondents rendered the question of exemption moot in this context. Overall, the judgment focused on the factual determination of the respondents' business activities and the subsequent implications for the Revenue's appeal, ultimately leading to the dismissal of the appeal based on the evidence presented.