1990 (3) TMI 219 - AT - Central Excise

Summary

Issues:
1. Whether products manufactured by one party and cleared on behalf of another should be treated as clearances of the latter.
2. Whether excise duty collected by one party should be added to the value of clearances of another.
3. Whether the longer period of limitation invoked in the Show Cause Notice was justified.
4. Whether the imposition of penalty is justified.

Analysis:

Issue 1:
The Tribunal referred to previous judgments to settle this issue. It was held that clearances made by one party on behalf of another cannot be treated as the clearances of the latter. The Tribunal disagreed with the Collector's decision to club the clearances made by 'Impha' on behalf of the appellant with the appellant's own clearances.

Issue 2:
The Tribunal confirmed the Collector's decision to add the excise duty collected by the appellant from 'Dicks' and 'M.K.' to the value of the appellant's clearances. Previous judgments supported this decision, stating that such additions are valid under the relevant provisions.

Issue 3:
Regarding the longer period of limitation invoked in the Show Cause Notice, the Tribunal found that the appellant had declared the manufacturing arrangement with 'Impha' in the classification list. However, the duty collected from 'Dicks' and 'M.K.' was not known to the Department until later, justifying the longer period of limitation for that purpose.

Issue 4:
The Tribunal upheld the imposition of a penalty of Rs. 10,000 on the appellant. The cross-objections filed by the respondent did not seek any relief but requested the dismissal of the appeal, which was not considered by the Tribunal as it lacked merit.

In conclusion, the Tribunal partially allowed the appeal, setting aside the demand for duty based on clearances by 'Impha' on behalf of the appellant. However, the demand based on the addition of excise duty collected from 'Dicks' and 'M.K.' to the appellant's clearances was upheld. The matter was remanded to the Assistant Collector for recalculation based on the Tribunal's findings.