2001 (5) TMI 599 - AT - Central Excise

Summary

Issues:
1. Eligibility of benefit of exemption in terms of Notification No. 217/86 on steel bins and trollies manufactured by the assessee.
2. Duty demand and penalty imposed on the appellants for manufacturing motor car seats and parts thereof.
3. Whether duty liability can be fastened upon the appellants for goods manufactured by an independent contractor.
4. Whether duty demand is barred by limitation.
5. Classification of goods under sub-heading 9403.00 of the Schedule to the Tariff.
6. Eligibility of material handling equipments as capital goods for credit under Rule 57Q of the Central Excise Rules.
7. Admissibility of benefit of exemption under Notification No. 217/86 to the goods in question.

Issue 1:
The appeals involve common issues regarding the eligibility of the benefit of exemption under Notification No. 217/86 on steel bins and trollies manufactured by the assessee. The Tribunal heard and disposed of these appeals together.

Issue 2:
In one case, the Commissioner of Central Excise confirmed a duty demand on trollies, bins, and pallets manufactured by the appellants and imposed a penalty. The duty demand was based on goods manufactured by a job worker. In another case, the Revenue appealed against the extension of the benefit of Notification No. 217/86 to iron and steel trollies and bins manufactured by the assessee.

Issue 3:
The contention was whether duty liability could be imposed on the appellants for goods manufactured by an independent contractor. The appellants argued that the job worker was responsible for duty payment, and the demand was beyond the normal limitation period.

Issue 4:
The question arose regarding the limitation period for the duty demand, with the appellants claiming no suppression of facts and arguing that they believed the job worker was liable for duty payment.

Issue 5:
The Tribunal examined the nature of fabrication jobs and found that the goods were manufactured within the factory premises of the appellants. It was established that the job worker was hired labor, not an independent manufacturer, leading to upholding the duty demand and penalty.

Issue 6:
A recent Tribunal decision held that material handling equipment qualifies as capital goods for credit under Rule 57Q, excluding them from the definition of inputs under Notification No. 217/86. This decision influenced the Tribunal's ruling on the admissibility of the exemption benefit.

Issue 7:
Considering the above decision on material handling equipment and capital goods, the Tribunal concluded that the benefit of exemption under Notification No. 217/86 was not applicable to the goods in question. The impugned order was set aside, and the penalty was reduced.

In conclusion, the Tribunal addressed various issues related to duty demand, penalty imposition, liability of manufacturers, classification of goods, and the admissibility of exemption benefits under Notification No. 217/86. The decision was based on the nature of fabrication jobs, the status of the job worker, and the eligibility of material handling equipment as capital goods. The Tribunal upheld duty demands, penalties, and ruled against the benefit of exemption for the goods in question.