2011 (1) TMI 859 - AT - Central Excise

Exemption under Notification No.50/03-CE - Who is required to file the declaration to claim area based exemption - Held that - in terms of the agreement between M/s. Gillete and M/s. MJ, it is the M/s.Gillete, who is the actual manufacturer, even if the department s allegation is accepted and M/s. MJ is treated as an agent of M/s. Gillete, since any action of an agent is to be treated as the action of the principal and since in this case, it is not disputed that the required declaration had been filed by M/s. MJ, the same will have to be treated as the declaration filed by M/s. Gillete. In view of this, even if the department s allegation that the relationship between M/s. Gillete and M/s. MJ is that of master and servant, is accepted, the exemption under notification no.50/03 can not be denied. - Decided in favour of assessee.

Summary

Issues:
1. Interpretation of agreement between two parties for packing of goods and availing duty exemption under Notification No.50/03-CE.
2. Determination of the actual manufacturer for filing the required declaration under the notification.
3. Validity of duty demands, interest, and penalties imposed by the Commissioner on the appellants.

Analysis:
1. The case involved a dispute regarding the packing of goods by one party for another and availing duty exemption under Notification No.50/03-CE. The agreement between the parties indicated that the goods were packed by one party and returned to the other. The department contended that the party returning the goods should be considered the manufacturer for availing the exemption.

2. The key argument was whether the party packing the goods or the party returning the goods should be considered the actual manufacturer for filing the required declaration under the notification. The appellants argued that even if the relationship between the parties was that of master and servant, the declaration filed by the packing party should be deemed as filed by the returning party, thus entitling them to the exemption.

3. The Commissioner had passed orders confirming duty demands, interest, and penalties against the appellants. The appellants challenged these orders, arguing that there was no basis for denying the duty exemption under Notification No.50/03-CE. The department maintained that the manufacturer, as per the conditions of the exemption, should file the declaration, and since the required declaration was not filed by the returning party, the exemption was rightly denied.

4. Upon considering the submissions and records, the Tribunal found that even if the returning party was considered an agent of the other party, the declaration filed by the packing party should be deemed as filed by the returning party. Therefore, the exemption under the notification could not be denied. The Tribunal concluded that there was no merit in the department's case, and the impugned orders were set aside, allowing the appeals of the appellants.