1991 (11) TMI 151 - Commissioner - Central Excise

Summary

Issues:
1. Duty demand on structurals allegedly manufactured and erected by job workers.
2. Imposition of penalties on the appellants for violation of Central Excise Rules.
3. Appellants' contention regarding duty demand and penalties imposed.

Analysis:
The judgment involves two appeals against Orders-in-Original issued by the Assistant Collector of Central Excise, demanding duty and imposing penalties on the appellants for structurals manufactured and erected by job workers. The appellants contended that they are not the manufacturers of the goods and that the duties demanded were beyond the scope of the Show Cause Notices. During the hearing, the appellants' counsel argued that the duties were demanded improperly, citing case law and circulars.

The adjudication orders demanded duties from the appellants treating them as de jure manufacturers and imposed penalties as proposed in the Show Cause Notices. The appellants argued that the Assistant Collector disregarded evidence and circulars, and the duties were demanded beyond the scope of the notices. The appellants also claimed that they were not the manufacturers of the goods in question.

The judgment carefully examined the Orders-in-Original and the appellants' contentions. It noted that the Show Cause Notices did not propose to demand duty from the appellants, acknowledging that the structurals were manufactured by the job workers. Therefore, demanding duties from the appellants in the Orders-in-Original was deemed legally unsustainable. The judgment emphasized that the supplier of raw materials is not a manufacturer unless the job workers are proven to be dummies or facades of the supplier. Since no such evidence was presented, the imposition of penalties on the appellants was deemed unjustified.

Ultimately, the judgment set aside the impugned orders, allowing the appeals without prejudice to any further action against the job workers' firms if warranted. The decision highlighted the importance of adhering to legal procedures and evidence in duty demands and penalty imposition under Central Excise Rules.