1998 (4) TMI 289 - AT - Central Excise

Issues:
1. Classification of passenger baggage trolleys under the Central Excises & Salt Act, 1944.
2. Allegations of manufacturing and removal of excisable goods without duty payment.
3. Imposition of penalty under Rule 4(2), 226, and 173Q of the Central Excise Rules.
4. Relationship between the appellant and M/s. Super Engineering Works in the manufacturing process.
5. Appellant's contention regarding the classification of steel frames and complete trolleys.
6. Evidence of manufacturing activities at M/s. Super Engineering Works' premises.

Classification Issue:
The appellant appealed against the order alleging that they manufactured passenger baggage trolleys without the required Central Excise License and misdeclared the goods. The Additional Collector classified the trolleys under T.I. 40 and imposed duty and penalties. The appellant argued they only produced steel frames, while M/s. Super Engineering Works assembled the trolleys. However, the Revenue claimed the appellant manufactured the complete trolley. The Tribunal found no evidence supporting M/s. Super Engineering Works' manufacturing activities and upheld the classification under T.I. 40 based on tender submissions and lack of disclosure about subcontracting.

Manufacturing and Duty Payment Issue:
The show cause notice accused the appellant of removing excisable goods without duty payment and misdeclaration. The appellant contended they only supplied steel frames, not complete trolleys. However, the Revenue's visit to M/s. Super Engineering Works revealed no manufacturing machinery, with parts being made at the appellant's factory. Lack of evidence of M/s. Super Engineering Works' operations supported the Additional Collector's findings, leading to the dismissal of the appeal.

Penalty Imposition Issue:
The Additional Collector invoked penalties under Rule 4(2), 226, and 173Q of the Central Excise Rules. The appellant's argument centered on their role in supplying steel frames, denying involvement in complete trolley manufacturing. Despite the appellant's claims of arms-length transactions with M/s. Super Engineering Works, the Tribunal found no proof of the latter's manufacturing activities, upholding the penalties based on the Additional Collector's decision.

Relationship with M/s. Super Engineering Works Issue:
The appellant emphasized their limited role in supplying steel frames to M/s. Super Engineering Works, denying any connection beyond that. However, the Revenue's investigation revealed discrepancies, such as the absence of machinery at M/s. Super Engineering Works' premises and the appellant's involvement in making trolley parts. The lack of evidence supporting M/s. Super Engineering Works' operations undermined the appellant's arguments, reinforcing the Additional Collector's decision.

Judicial Precedents and Classification Issue:
The appellant relied on judicial precedents and alternative classification arguments for passenger baggage trolleys. However, the Tribunal referenced a case involving carriage trolleys as furniture, affirming the classification of baggage trolleys under T.I. 40. The Tribunal dismissed the appeal, citing the precedents and classification principles, thereby upholding the original order.

Conclusion:
The Tribunal dismissed the appeal, affirming the Additional Collector's decision on classification, penalty imposition, and duty payment issues. The lack of evidence supporting M/s. Super Engineering Works' manufacturing activities and the appellant's involvement in producing trolley parts led to the rejection of the appellant's claims. The classification of passenger baggage trolleys under T.I. 40 was upheld based on judicial precedents and the specific circumstances of the case.

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