1989 (8) TMI 147 - Commissioner - Central Excise

Summary

Issues:
1. Appeal against the order-in-original passed by the Assistant Collector of Central Excise, Madras.
2. Allegation of error in demanding duty by the Assistant Collector under Section 11A.
3. Claim of time-barred demand and absence of bond or surety.
4. Interpretation of legal precedents regarding corporate character and distinct legal entities.

Analysis:
1. The judgment involves an appeal by M/s. Tamilnadu Mopeds Ltd. against the order-in-original issued by the Assistant Collector of Central Excise, Madras II Division. The appeal challenges the demand made by the Assistant Collector, raising issues regarding the authority's power under Section 11A and the alleged suppression of facts by the appellants.

2. The appellants argued that the demand is time-barred and highlighted the absence of any bond or surety issued by them. They contended that the Assistant Collector erred in demanding duty without proper jurisdiction, especially considering that the appellants were informed of their eligibility for a specific benefit under Notification No. 175/86.

3. During the proceedings, the consultant for the appellants presented legal precedents to support their case. Referring to the decision in the case of M/s. Spencer & Co. Ltd. v. The Commissioner of Wealth Tax, Madras, it was emphasized that each company maintains a separate juristic entity, even if shares are held by a parent company. Additionally, the decision in the case of Government Ceramic Centre Cannanore v. The Collector of Central Excise, Cochin was cited to establish that distinct legal entities cannot have their clearances clubbed for exemption purposes.

4. Based on the legal precedents presented, the judgment concluded that M/s. Tamilnadu Mopeds Ltd. retains its distinct legal entity status separate from its holding company. Therefore, the appellants were deemed eligible for the exemption under Notification No. 175/86. Consequently, the impugned order of the lower authority was set aside, and the appeal was allowed in favor of the appellants.