2001 (3) TMI 175 - AT - Central Excise

Summary

Issues:
1. Whether the appellants are liable to pay duty on RCC poles manufactured by them?
2. Whether the relationship between the appellants and contractors is on a principal to principal basis?
3. Whether the duty demand against the appellants is sustainable?

Analysis:

1. The Department issued show cause notices to the appellants demanding duty on the RCC poles manufactured by them. The appellants contended that they are not the manufacturers of the RCC poles, and the contractors are the manufacturers. The Commissioner, however, confirmed duty demands against the appellants under Section 11A(1) of the C.E. Act, 1944, for the period in question.

2. The learned Counsel for the appellants argued that previous orders by the Tribunal had established that the contractors, not the appellants, were the manufacturers of the RCC poles. He referred to specific final orders that supported the appellants' position, emphasizing the principal to principal relationship between the appellants and contractors as per the terms of the contracts.

3. The Department's representative contended that the RCC poles were goods liable to duty, and since the goods were manufactured within the appellants' premises, they were responsible for the duty payment. The representative argued that the contractors could not be considered independent contractors and that the relationship was not on a principal to principal basis.

4. Upon considering the submissions and previous Tribunal orders, it was observed that the relationship between the appellants and contractors was indeed on a principal to principal basis. The Tribunal had previously ruled in favor of the appellants in similar cases, rejecting the argument that the contractors were hired workmen. The terms and conditions of the contracts for manufacturing RCC poles supported the appellants' position, leading to the setting aside of the impugned orders and allowing the appeals with consequential relief.

This detailed analysis of the judgment highlights the key issues, arguments presented by both parties, and the Tribunal's reasoning in arriving at the decision to set aside the duty demands against the appellants based on the established principal to principal relationship with the contractors.