2000 (10) TMI 768 - AT - Central Excise

Summary

Issues:
1. Whether the Turbo Generating Sets (TG Sets) were manufactured by the appellants or by D.L.F. Industries.
2. Liability for payment of Central Excise duty on the TG Sets.
3. Validity of the demand of duty, confiscation of TG Sets, and imposition of penalty on the appellants.

Detailed Analysis:
Issue 1: The primary issue in this case was to determine whether the TG Sets were manufactured by the appellants or by D.L.F. Industries. The Commissioner found that D.L.F. Industries acted as job workers and performed the manufacturing activities as per the appellants' requirements. It was established that D.L.F. Industries were the real manufacturers of the TG Sets, not the appellants.

Issue 2: The liability for payment of Central Excise duty on the TG Sets was a crucial aspect of the case. The appellants argued that since D.L.F. Industries were the actual manufacturers, the duty liability should fall on them as per the contract. The Tribunal referred to precedents and held that the real manufacturer, in this case, D.L.F. Industries, was responsible for the Central Excise duty, not the appellants who did not engage in the manufacturing process.

Issue 3: The validity of the demand of duty, confiscation of TG Sets, and imposition of penalty on the appellants was contested. The Tribunal, following the precedent set in a similar case, concluded that since D.L.F. Industries acted as job workers and were the actual manufacturers, the demand of duty on the appellants was deemed illegal. Consequently, the order of confiscation and penalty imposition was also deemed unsustainable.

In conclusion, the appeal was allowed in favor of the appellants, granting them consequential benefits. The Tribunal ruled that the TG Sets were manufactured by D.L.F. Industries as job workers, absolving the appellants of the Central Excise duty liability and rendering the demand, confiscation, and penalty unjustified.