1983 (12) TMI 299 - AT - Central Excise

Summary

Issues involved: Determination of whether the appellants are the manufacturers of electrical stampings and laminations u/s 2(f) of the Central Excises and Salt Act, 1944, applicability of time-bar of six months u/s 11A of the Central Excises Act, and the correctness of the penalty imposed and appropriation of security money.

Manufacturing of Electrical Laminations:
The appeal arose from an order imposing a penalty and demanding duty on the appellants for Electrical Laminations cleared during a specific period. The Collector held that the appellants were the real manufacturers based on the fact that the second Company manufactured the goods as per the appellants' specifications and returned the entire production to them. The appellants contended that supplying raw material to a subcontractor does not make them the real manufacturer, citing relevant case laws.

Appellants' Arguments and Case Laws:
The appellants argued that they are not the manufacturers as per Section 2(f) of the Act and challenged the vagueness of the original authority's order. They cited a judgment of the Madras High Court and contended that their case aligns with it, emphasizing that the second Company is an independent unit regardless of the material used for manufacturing.

Department's Submission and Supreme Court Precedent:
The Department submitted that a Supreme Court judgment governs the case, even though it was not cited before the Madras High Court. The appellants argued that the Supreme Court judgment is irrelevant to their case, and the Madras High Court did not consider it for the same reason.

Judicial Analysis and Precedents:
The Tribunal considered the arguments from both sides and analyzed the facts of the case. They referred to the judgment of the Madras High Court, which found relevance in the present case as the appellants supplied raw material and specifications to the second Company, similar to the case before the High Court. The Tribunal also referenced a Supreme Court judgment where the appellants were deemed the real manufacturers based on specific circumstances, which differed from the present case.

Decision and Conclusion:
After evaluating the facts and legal precedents, the Tribunal concluded that the appellants' case aligns with the judgment of the Madras High Court. They found no evidence to support the claim that the second Company was a dummy of the appellants, emphasizing that supplying raw material and specifications does not automatically make one the manufacturer. Therefore, the appeal was allowed in favor of the appellants.