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TMI Blog1993 (9) TMI 228X X X X Extracts X X X X X X X X Extracts X X X X ..... and conditions contained in the letter dated 25-9-1979. Accordingly, a factory in the name and style of M/s. Waman Poles Pvt. Ltd. was set up at Amravati for executing the said order of the M.S.E.B. As the poles manufactured at this unit were being manufactured on behalf of M.S.E.B. after supply of the main raw material i.e. cement by M.S.E.B., they were asked to take out a licence in Form L-4 in 1981. The M.S.E.B. duly applied for a licence and were issued a Central Excise licence. They had been filing price lists, classification lists from time to time and maintaining various statutory records till 31-3-1983 and the poles manufactured by the contractors were being cleared by M.S.E.B. on payment of duty. It came to the notice of the department that during the period from 1-3-1981 to 31-8-1983, the M.S.E.B. had not paid the differential duty amount on escalation of the prices of the raw material concerned in the manufacture of PSC poles and accordingly five demand show cause notices for different periods and different raw materials were issued to M.S.E.B. Two show cause notices for removal of M.S. Grills without payment of duty and for captive consumption of broken PSC poles were a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... if the contractors could not consume fully the quantity of cement issued, the appellants were entitled to recover the same at cost rate or market rate whichever was higher plus 15% to cover other heads and taxes; all tools, plant and machinery required for the work were to be provided by the contractors themselves and materials other than cement were to be directly arranged by the contractors. The various contractors purchased their own plant and machinery: hired their own staff; procured their own materials and carried out manufacture of PSC poles. 2. In 1981, the concept of Primary manufacturer and Secondary manufacturer was introduced and Rule 56C was introduced in the Statute Book. The Central Excise authorities appealed to the appellants and the contractors to apply for and obtain licence for the manufacture of PSC poles. Throughout the relevant period in dispute, the stand of the department that the appellants were the primary manufacturers and that the contractors were the secondary manufacturers, was not accepted by the appellants. The Department issued show cause notices to M/s. Neelam Enterprises, M/s. Mangalam Industrial Corporation; M/s. Waman Poles Pvt. Ltd., M/s. C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Board would be made on the assumption that each bag contains 50 kg. In case, you desire to accept the same on actual weight basis, necessary arrangement may be made by you for truck weighment at your expenses and in the presence of the Board s representative. You will be responsible for the safe custody of the cement issued by the Board and will be required to render proper account of the allocation and disposal of the same. In case you are unable to account for the full quantity issued to you, the recovery of the same shall be effected at `cost rate or `market rate whichever is higher plus 15% to cover Board s overheads plus taxes. The Board shall not be responsible for any delay in the supply of cement while it will endeavour to see that no delay occurs on this score. Delay if any, beyond the control of the Board shall however, be given due consideration for granting extension of time. The supply of cement shall be restricted to the quantity based on the standard consumption as per format shown in the tender and any extra use of cement either owing to low quality or due to wastage shall be to your account. Extra consumption of cement on account of breakages of poles up ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e deemed to have accepted this contract on the terms and conditions set out therein. 4. From the terms and conditions of the works contract, the following points emerged - (a) There is no financial involvement of the Electricity Board in all 4 points; (b) The factory premises and equipment belong to the units; (c) Employees of the units are not under the control of the Board; (d) Out of 7 different new materials, only cement is supplied by the Board at a fixed rate. However in reply to the show cause notice, the Board has mentioned that sometimes it had supplied steel wire also. (e) Supervision by the Board of the units was only to ensure quality. 4(1) Neither is there any allegation in the show cause notice that M/s. Waman Poles was created as a dummy and device in order to evade payment of duty nor there is any evidence on record that the units were dummy concerns working under the direct control of the Board and that transactions between the two were not on a principal to principal basis. The department has not brought out any nexus between the units and the Board to arrive at the conclusion that the units were set up with the fradulent intention to evade duty. The ..... X X X X Extracts X X X X X X X X Extracts X X X X
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