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1987 (6) TMI 149 - AT - Central Excise
Issues:
The issues involved in the judgment are whether the appellants were the actual manufacturers of slides, whether they were entitled to duty-free clearances under Notification No. 77/83, and whether duty should be demanded from them. Manufacturing Activity and Licensing Requirement: The show cause notice alleged that the appellants were manufacturing slides without a license, using raw materials supplied by M/s. ITC. The notice demanded duty payment and compliance with excise formalities. The appellants claimed they were the manufacturers, entitled to duty-free clearances under Notification No. 77/83. Agreement Analysis and Manufacturing Relationship: The agreement between the appellants and M/s. ITC detailed the supply of materials and specifications for manufacturing slides. The appellants argued they operated independently, owning their machinery, and carried out printing work for various clients. The Tribunal considered previous judgments to determine the actual manufacturer in such arrangements. Principal to Principal Relationship: The Assistant Collector concluded that the agreement was not on a principal to principal basis, citing various factors. However, the Tribunal disagreed, emphasizing the independence of the appellants and the nature of their relationship with M/s. ITC as raw material supplier and manufacturer. Notification No. 305/77 and Manufacturing Authorization: The Assistant Collector invoked Notification No. 305/77 to designate M/s. ITC as the de jure manufacturer, requiring compliance from the appellants. The Tribunal clarified that this notification applied when goods were manufactured on behalf of another, which was not the case here. Conclusion and Relief Granted: The Tribunal found that the lower authorities erred in designating M/s. ITC as the actual manufacturers, thereby denying the appellants the benefit of Notification No. 77/83. The appeal was allowed, setting aside the orders and providing consequential relief to the appellants.
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