1988 (12) TMI 255 - AT - Customs

Summary

Issues Involved:
1. Clubbing of clearances of various units of MPSIC for computing the eligibility limit of Rs. 20 lakhs under Notification No. 141/79.
2. Determination of the manufacturer for the purpose of exemption under Notification No. 141/79.
3. Time-barred demand of duty for clearances before 28-9-79.

Detailed Analysis:

Clubbing of Clearances of Various Units of MPSIC
The appellants contested the clubbing of clearances from various units of the Madhya Pradesh State Industries Corporation (MPSIC) for computing the eligibility limit of Rs. 20 lakhs under Notification No. 141/79. The Assistant Collector and the Collector (Appeals) both upheld the clubbing, stating that MPSIC was the manufacturer and controller of the units, and therefore, all clearances under its control should be aggregated. The Assistant Collector noted that all workers were employees of MPSIC and that MPSIC was the owner and controller of the unit, thus making it the manufacturer under Section 2(f) of the Central Excise Act, 1944. The Collector (Appeals) supported this view, emphasizing that the ownership transfer memo indicated MPSIC as the manufacturer and that the appellants had no separate identity from MPSIC.

Determination of the Manufacturer for Exemption Purposes
The appellants argued that MPSIC should not be treated as the manufacturer and that the ownership and manufacturer are distinct concepts. They cited case law to support their contention that the exemption limit should apply to their factory alone. However, the Tribunal found that the term 'manufacturer' under Section 2(f) of the Central Excise Act includes any person who engages in the production or manufacture of excisable goods on their own account or through hired labor. The memo transferring the unit to MPSIC clearly indicated that MPSIC was the owner and employer of the staff, making it the manufacturer. The Tribunal concluded that the authorities were correct in aggregating the clearances of all units under MPSIC for determining the exemption limit.

Time-barred Demand of Duty for Clearances Before 28-9-79
The Collector (Appeals) revised the demand of duty, holding that the demand for goods cleared before 28-9-79 was time-barred since the show cause notice dated 26-3-80 was received by the appellants on 27-3-80. This part of the judgment was not contested further in the appeal, and the Tribunal did not find any reason to alter this finding.

Conclusion
The Tribunal upheld the orders of the Assistant Collector and the Collector (Appeals), confirming that MPSIC was the manufacturer and that the clearances from all its units should be aggregated for the purpose of the exemption limit under Notification No. 141/79. The appeal was dismissed as devoid of merit, and the revised demand of duty, excluding the time-barred period, was sustained.