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Home Case Index All Cases Central Excise Central Excise + AT Central Excise - 2007 (7) TMI AT This

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2007 (7) TMI 75 - AT - Central Excise


Issues:
Appeal against order demanding duty and imposing penalties on companies and directors for supply of goods, dispute over differential duty payment, consideration of job work relation between companies, challenge to impugned order.

Analysis:
The appeals were against an order demanding duty and penalties from a company and its directors for the supply of goods. The department issued a show-cause notice for recovery of differential duty from the company, which was contested on various grounds. The essential facts were that the manufacturing company supplied goods to the appellant company under statutory invoices, and the show-cause notice did not raise objections to their returns. The impugned order suggested a 'master-hired labor' relation between the companies, but the appellants argued against it. The Commissioner's findings were based on certain facts like machinery ownership and financial controls, which the appellants disputed.

The Tribunal noted that the manufacturing company and the appellant were separate entities, with the former manufacturing goods and filing returns. The Commissioner's findings of a 'master-hired labor' relation were disputed by the Tribunal, emphasizing that the manufacturing company was recognized as a job worker. A similar case involving a principal manufacturer and job workers was cited, where the demand for duty was not sustainable, and the Tribunal's decision was upheld by the Supreme Court. The Tribunal found in favor of the appellant, emphasizing the commercial nature of the transaction and the lack of involvement in the manufacturing process.

The Tribunal held that the relationship between the appellant and the manufacturing company was on a principal-to-principal basis, emphasizing the commercial nature of the transaction. The Tribunal found the demand for duty on the appellant to be far-fetched and without legal basis, highlighting a dichotomy in the Revenue's approach. The impugned order was set aside, and the appeals were allowed, indicating a lack of legal basis for demanding duty from the appellant company.

In conclusion, the Tribunal analyzed the relationship between the appellant and the manufacturing company, emphasizing the commercial nature of the transaction and the lack of legal basis for demanding duty from the appellant. The impugned order was set aside, and the appeals were allowed, highlighting the dichotomy in the Revenue's approach and the lack of legal basis for the demand.

 

 

 

 

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