1992 (7) TMI 166 - AT - Central Excise

Summary

Issues:
1. Duty demand on goods cleared without payment under Notification No. 167/79.
2. Interpretation of Chapter X of Central Excise Rules, 1944 regarding liability for duty payment.
3. Applicability of AR 3A forms and consignee acknowledgment in duty determination.

Analysis:
The case involved an appeal by the Collector of Central Excise and Customs, Madurai against an order-in-appeal passed by the Collector of Central Excise (Appeals), Madras. The dispute arose from M/s. Fenner (India) Ltd., Madurai clearing motor vehicle parts without duty payment under Notification No. 167/79. The issue was whether duty could be demanded on goods cleared without consignee acknowledgment under AR 3A forms. The Department argued that the manufacturer must pay duty if goods do not reach the consignee, citing Chapter X procedures. However, the respondents contended that Chapter X rules did not apply, and duty liability rested with users post-clearance.

The Tribunal analyzed previous cases like Steel Authority of India Ltd. v. Collector of Central Excise and BajajAuto Ltd., Pune v. Collector of Central Excise to determine duty liability. It was established that AR 3A forms were not statutorily prescribed under Chapter X, and duty payment responsibility post-clearance could be on the user manufacturer. The Tribunal emphasized that duty recovery under Rule 196 of Central Excise Rules did not have a time limit, and the user manufacturer, not the original manufacturer, should ultimately bear duty responsibility for goods obtained under Chapter X.

Referring to the case of Madras Radiators & Pressings Ltd., the Tribunal reaffirmed that duty could not be demanded from the manufacturer if concessional rated material was obtained by users. Consequently, the Tribunal rejected the appeal, upholding the Collector (Appeals) decision. The judgment clarified the duty payment obligations under Notification No. 167/79 and the application of Chapter X rules in determining liability for duty payment on goods cleared without consignee acknowledgment.