2001 (9) TMI 128 - AT - Central Excise

Summary

Issues:
1. Duty payment responsibility of traders for goods processed by job workers.
2. Interpretation of Notification 27/92 regarding duty payment obligations.
3. Applicability of Supreme Court judgments in similar cases.
4. Legal liability of traders for duty payment under Central Excise Act.

Analysis:
1. The case involved traders who had goods processed by job workers without paying duty, leading to the confiscation of the goods. The Dy. Commissioner allowed redemption of the goods on payment of fines and penalties imposed on both the job workers and the trader. The Commissioner (Appeals) upheld the confiscation but vacated the duty payment confirmation, citing Supreme Court judgments that traders are not responsible for duty payment.

2. The emphasis was placed on Notification 27/92, which exempts traders from registration requirements when getting goods manufactured by job workers. The claim was made that if job workers fail to fulfill conditions under the notification, traders are responsible for fulfilling them. Reference was made to the Supreme Court judgment in Bajrang Gopilal v. M.N. Balbhandari to support this claim.

3. The judgment discussed the revival of Notification 305/77 in the form of Notification 27/92 and its impact on traders using processing houses for gray cloth. It was noted that traders cannot be considered manufacturers based on legal precedents, such as the Ujagar Prints Judgment, which affects their duty payment obligations.

4. The judgment analyzed the legal provisions under the Central Excise Act, 1944, specifically Section 12 and Notification No. 68/63-C.E. It highlighted that the burden of duty payment cannot be imposed on traders in the absence of specific provisions transferring such liability. The Commissioner (Appeals) order was upheld, dismissing the appeal and affirming that traders are not legally liable to pay duties unpaid by job workers.

In conclusion, the judgment clarified the duty payment responsibilities of traders in cases where goods are processed by job workers, interpreting relevant notifications and legal provisions to determine the liability of traders under the Central Excise Act.