1994 (12) TMI 152 - AT - Central Excise

Summary

Issues:
1. Whether the appellants should be deemed as manufacturers of gramophone records for the purpose of excise duty exemption.

Analysis:
The case involved an appeal by the Revenue against an order passed by the Collector (Appeals), Madras, regarding the valuation of goods for excise duty exemption. The appellants were engaged in manufacturing cassettes and receiving gramophone records from another company. The Revenue alleged that the value of the records obtained by the appellants needed to be added to the value of goods produced by them to determine duty liability. The Assistant Collector deemed the appellants as manufacturers based on Section 2(f) since they supplied master discs. However, the Collector (Appeals) held that the company supplying the records should be deemed as the manufacturer since they held a license and paid duty. The main issue was whether the appellants should be considered manufacturers of the gramophone records for the purpose of exemption under Notification No. 83/83.

The appellants argued that they should be deemed as manufacturers of the gramophone records as per Section 2(f) since they engaged in the production of goods on their account, even though the manufacturing was done by another company. The Tribunal referred to a previous case where it was held that supplying raw materials to independent units does not make the supplier the manufacturer if the dealings are on a principal-to-principal basis. The Tribunal concluded that the company manufacturing the records, who held a license and paid duty, should be considered the manufacturer, not the appellants who supplied the master discs. Therefore, the value of the records could not be clubbed with the cassettes for duty exemption eligibility.

In the final decision, the appeal was rejected based on the finding that the appellants could not be deemed as manufacturers of the gramophone records, and the value of the records could not be added to the value of the cassettes for determining duty exemption eligibility under Notification No. 83/83.