1997 (12) TMI 381 - AT - Central Excise

Ball point pens and parts thereof - Tips - Notification No. 146/82-C.E., dated 22-4-1982 exempted, inter alia parts of ball point pens

Summary

Issues:
Classification of goods under Notification No. 156/90, demand of duty on brass tips, alleged intent to evade payment of duty, relationship between job workers and the Assessee Company, limitation of demand, retrospective effect of notifications, declaration of manufacturing status in classification lists.

Analysis:
The case involved M/s. Nalanda Pen Mfg. Company Private Limited manufacturing ball point pens and refills, including brass tips obtained from job workers. The issue centered around the demand of duty on brass tips manufactured during a specific period. The jurisdictional authority issued a show cause notice alleging deliberate evasion of duty and imposed penalties on the company and its directors.

The Appellants argued that brass tips were part of refills and should be exempt from duty based on previous notifications. They highlighted correspondence with customs authorities supporting their claim. The Appellants also contested the relationship between the company and job workers, asserting the job workers' independence and challenging the Collector's assumption of common ownership.

The Departmental Representative argued against retrospective exemption of parts of refills and claimed that the Appellants were correctly considered the manufacturers of the tips. The issue of declaration in classification lists and alleged creation of units as colorable devices were raised.

The Tribunal analyzed the notifications and correspondence, concluding that the show cause notice wrongly alleged duty on brass tips. As the notifications covered parts of refills, the demand of duty was deemed unjustified. The Tribunal did not delve into the manufacturing entity or limitation of demand issues due to the merit-based success of the appeals.

Ultimately, the Tribunal allowed all four appeals, overturning the Collector's orders and providing consequential relief. The judgment emphasized the incorrectness of the duty demand on brass tips and upheld the Appellants' position based on the notifications' coverage of parts of refills.