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TMI Blog1993 (9) TMI 186X X X X Extracts X X X X X X X X Extracts X X X X ..... ers fabricated in their workshop out of duty-paid exhaust fans and water-pumps bought from the market and scrap iron/tin sheets available in their workshop, were meant for the use in their own offices and not for sale. They contended that the fabrication of 5 coolers in 1980-81, 10 coolers in 1981-82 and 14 coolers in 1982-83 for the use in their own offices could not be deemed as manufacture within the meaning of Section 2(f) of the Central Excises and Salt Act, 1944 and the Rules framed thereunder and accordingly no duty could be recovered by the department on the coolers in question. They also contended that the demand issued beyond the period of 6 months was time-barred since the appellants workshop was visited from time to time by Central Excise officers, who were aware of the fabrication of coolers by the appellants for their own use. However, by the impugned order dated 24-1-1983 the Additional Collector confirmed the demand of duty of Rs. 26,136.60 on 29 pieces coolers fabricated by the appellants during the period 1-4-1980 to 31-3-1983. He also imposed a penalty of Rs. 5, 000/- on the appellants under Rule 173Q. 2. On behalf of the appellants, the learned advocate Shr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acture and sale of Desert Coolers . During the period 1-4-1980 to 31-3-1983 the total number of Coolers assembled by them in their workshop was only 29. Out of these 5 pcs. were assembled in 1980-81,10 pcs. in 1981-82 and 14 pcs. were assembled in 1982-83. The main parts required for the assembly of the disputed Desert Coolers viz. exhaust fans, and water pumps were purchased by the appellants from the market. The body of the cooler was fabricated out of scrap tin/iron sheets available m their workshop. The assembled Desert Coolers were invariably used by the appellants in their offices/factory and were never offered or advertised for sale as ready assembled units. It is seen that in the case of Life Insurance Corporation of India, Bombay v. CCE, Bombay reported in 1985 (21) E.L.T. 816 the Tribunal has held that if water coolers were erected by a person by his own efforts and for his own use through assembly of different parts, the product would not be excisable. Paras 7 and 8 of the said decision being relevant are reproduced below :- 7. We have carefully considered the submissions made on both sides. On behalf of the Department, it has been stated that the assembling of E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly possible to take a view different from the views expressed in the above decision of the Hon ble High Court of Allahabad in so far as interpretation of the scope of sub-item (2) of Entry 29A of the Central Excise Tariff is concerned. 8. It may be added that there may be millions of consumers spread along the length and bredth of the country who, during summer, are taking recourse to installing coolers in their residences and offices by purchasing separately exhaust fans and pumps and hiring the services of the ordinary carpenters for constructing the wooden cabins and putting up the same. It is inconceivable that we should have a pattern of Excise Levy which should treat the residences of millions of ordinary citizens as factories and subject them .to the requirements of declaring their premises for taking out a Central Excise licence, maintaining excise records and taking clearances on payment of duties on gate passes, etc. It is precisely for this reason, no doubt, that while drafting the relevant Tariff Item, sale or offer for sale as ready assembled units was made a pre-condition for charge of duty. On the ratio of the Tribunal s decision quoted above we hold that the coo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of facts or contravention of any provision of the Act or Rules made thereunder, with intent to evade payment of duty. It was observed by this Court that something positive other than mere inaction or failure on the part of the manufacturer or producer or conscious or deliberate withholding of information when the manufacturer knew otherwise, is required before it is saddled with any liability beyond the period of six months had to be established. Whether in a particular set of facts and circumstances there was any fraud or collusion or willful mis-statement or suppression or contravention of any provision of any Act, is a question of fact depending upon the facts and circumstances of a particular case. The Tribunal, however, had held contrary to the contention of the appellants. The Tribunal noted that dhoop sticks are different products from agarbaties even though they belonged to the same category and the Tribunal was of the view that these were to be treated differently. Therefore, the clarification given in the context of the agarbaties could not be applicable to dhoop sticks etc., and the Tribunal came to the conclusion that inasmuch as the appellant had manufactured the goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ligence on the part of the producer or manufacturer either not to take out a licence in case where there was scope for doubt as to whether licence was required to be taken out or where there was scope for doubt whether goods were dutiable or not, would not attract Section 11A of the Act. In the facts and circumstances of this case, there were materials, as indicated to suggest that there was scope for confusion and the appellants believing that the goods came within the purview of the concept of handicrafts and as such were exempt. If there was scope for such a belief or opinion, then failure either to take out a licence or to pay duty on that belief, when there was no contrary evidence that the producer or the manufacturer knew that these were excisable or required to be licensed, would not attract the penal provisions of Section 11A of the Act. If the facts are otherwise, then the position would be different. It is true that the Tribunal has come to a conclusion that there was failure in terms of Section 11A of the Act. Section 35L of the Act, inter alia, provides that an appeal shall lie to this Court from any order passed by the Appellate Tribunal relating, among other things, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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