2002 (11) TMI 105 - SC - Central Excise

Whether the order under challenge is sustainable in law? Whether the respondent-assessee was eligible for exemption under Notification No. 120/1975-C.E., dated 30th April, 1975 (for short, the exemption notification )? Held that - A perusal of extracts of the order under appeal shows that the Tribunal was not very clear about the import of the exemption notification. The portion of the order under appeal ignores the evidence referred to by the Collector (Appeals) in paragraph (7) of his order. Also to note that the contention of the assessee that in view of the conclusion arrived at by the Tribunal, the other contentions, namely, the power to issue the notice and the question of limitation, which were urged before it, were not considered. Thus set aside the order under appeal and remand the case to the Tribunal for fresh disposal in accordance with law on all the contentions raised before it. 11.The civil appeal is, accordingly, allowed.

Summary

Issues:
Whether the order under challenge is sustainable in law?

Analysis:
The case involved an appeal by the Revenue against the order of the Customs, Excise and Gold (Control) Appellate Tribunal to determine the eligibility of the respondent-assessee for exemption under Notification No. 120/1975-C.E. The assessee manufactured hand knitting machines and sold them to a company, claiming benefit under the exemption notification. The Assistant Collector initially accepted the contention, but the Collector (Appeals) issued a notice revising the decision and demanding differential duty. The Tribunal, in the impugned order, held that the assessee was entitled to the benefit of the exemption notification, leading to the Revenue's appeal.

The main contention raised by the Revenue was that the buyer of the machines had financial and other interests, influencing the price, thereby disqualifying the assessee from the exemption. On the other hand, the assessee argued that there was no evidence to show that the invoice price was influenced by any relationship between the buyer and the manufacturer. The Tribunal's order was based on the interpretation of the exemption notification, which exempted duty based on the invoice price if not influenced by any relationship between the manufacturer and the buyer beyond the sale relationship.

The Tribunal's order was found to be unclear about the import of the exemption notification. It failed to consider evidence mentioned by the Collector (Appeals) and overlooked contentions related to the power to issue notice and limitation. Consequently, the Supreme Court set aside the order and remanded the case to the Tribunal for fresh disposal, directing a comprehensive consideration of all contentions raised before it. The civil appeal was allowed without any order as to costs.