1993 (8) TMI 162 - AT - Central Excise

Summary

Issues: Duty demand against M/s. Telerad, imposition of penalty, responsibility under Central Excise Law, manufacturing status of M/s. Telerad

In the judgment delivered by Shri R. Jayaraman, the appeal was against an order dated 26-12-1984 concerning duty demand and penalty imposed on M/s. Telerad, one of the parties involved. The duty demand was based on alleged evasion of duty and non-accountal of T.V. sets by M/s. Mac Electronics, where M/s. Telerad were treated as manufacturers. The Collector confirmed duty demand on 127 T.V. sets against M/s. Telerad and imposed a penalty of Rs. 25,000. The appeal contested the duty demand and penalty, not challenging the confiscation order of T.V. sets seized from M/s. Telerad. M/s. Telerad expressed willingness to surrender the seized T.V. sets and those seized from M/s. Mac Electronics to the Department.

The appeal involved a review of the Central Board of Excise & Customs' order remanding the case back to the Collector for adjudication. The Board highlighted that all excise formalities were completed by M/s. Mac Electronics, and the case required separate hearings for both M/s. Mac Electronics and M/s. Telerad. The Collector, in the de novo proceedings, concluded that M/s. Telerad were the manufacturers due to the supply of raw materials and absence of a declaration authorizing M/s. Mac Electronics to manufacture on their behalf. The appellant argued that these findings contradicted the Board's direction and that they had paid duty amounts in advance to M/s. Mac Electronics. The appellant contended that they should not be held responsible for any duty evasion by M/s. Mac Electronics.

After considering both sides, it was established that M/s. Mac Electronics fulfilled their statutory obligations as a Central Excise Licensee. The key issue was whether M/s. Telerad could be held accountable under the Central Excise Law. The contract between M/s. Telerad and M/s. Mac Electronics indicated that duty liability should be discharged by M/s. Mac Electronics as a loan licensee. The judgment emphasized that M/s. Mac Electronics were not a dummy unit and should be considered a manufacturer based on established legal precedents. The conclusion was that M/s. Telerad should not be treated as manufacturers, and the duty demand and penalty imposed on them were set aside.

Regarding the confiscated goods, the Department was granted liberty to take over the goods and handle them according to the law.