1982 (4) TMI 279 - Board - Central Excise

Summary

Issues involved: Appeal against duty liability and penalty imposed by the Collector of Central Excise.

Summary:
The appeals were filed by three common partners in two firms manufacturing A.D.V. wheels and axles without obtaining a Central Excise license or paying the duty. A Show Cause Notice was issued to them for non-compliance. The Collector confirmed duty liability for a specific period and imposed a penalty on the appellants individually.

During the hearing, the Consultant argued that the firms were separate legal entities, entitled to exemptions under specific notifications. They contended that the demand for duty was time-barred and that the penalty imposed was unjustified. The Consultant also highlighted the issue of classification of goods and the benefit of sales made during trading activities.

The Board observed that the two concerns were separate legal entities despite having common partners. The clearances of the firms could not be combined for exemption purposes. Even if the partners were considered as manufacturers, each had a separate existence and should be treated individually. The Board found the demand for duty from the appellants legally unsustainable and set aside the penalties imposed on them.

The Board criticized the casual imposition of penalties under Rule 173Q and emphasized the seriousness of such actions. The Order did not prevent further action against the actual manufacturers of the goods.