2000 (8) TMI 1136 - AT - Central Excise

Summary

Issues:
1. Duty demand and penalty imposed by the Commissioner of Central Excise on M/s. Mac Designers and M/s. Mac Venetian.
2. Classification of vertical blinds under Chapters 76 and 66 of the CETA.
3. Exemption claimed under Notification No. 65/87.
4. Verification of manufacturing process with or without the aid of power.
5. Sales tax returns as the basis for confirming duty demand.
6. Lack of independent inquiry by the Commissioner regarding actual production and sale of furniture.
7. Grounds for setting aside the impugned order.

Analysis:
1. The appeal was filed against the duty demand and penalty imposed by the Commissioner of Central Excise on M/s. Mac Designers and M/s. Mac Venetian. The Commissioner confirmed duty demand and penalties on both parties through a common order. The appellants contested the correctness of the Show Cause Notices, denying the sale of furniture and liability to pay duty. The Commissioner's order was challenged through this appeal.

2. M/s. Mac Venetians were engaged in manufacturing venetian blinds and vertical blinds classified under Chapters 76 and 66 of the CETA. They claimed exemption under Notification No. 65/87 for vertical blinds manufactured without the aid of power. However, during a visit to their premises, it was found that vertical blinds were being manufactured with the aid of power, leading to duty demand.

3. The Commissioner based the duty demand on figures from sales tax returns filed by the appellants. The appellants argued that the duty confirmation solely based on these figures was incorrect, as no independent inquiry was conducted regarding actual production and sale of furniture. The appellants were engaged in various activities, not exclusively furniture manufacturing, which the Commissioner failed to consider.

4. The Tribunal noted that the duty demand and penalty imposed on M/s. Mac Venetian had already been set aside by another Bench for fresh decision. Regarding the lack of independent inquiry, the Tribunal agreed with the appellants. The Commissioner did not investigate the actual manufacture and clearances of furniture, failing to consider evidence such as raw material purchase, electricity consumption, and labor employed during the disputed period.

5. Consequently, the Tribunal set aside the impugned order of the Commissioner and accepted the appeal by way of remand. The case was sent back to the adjudicating authority for a fresh decision after affording full opportunity to the appellants to present their case. The Commissioner's order was deemed unsustainable due to the lack of an independent inquiry into the actual production and sale of furniture by the appellants.