9911796707
TMI Blog1996 (2) TMI 243X X X X Extracts X X X X X X X X Extracts X X X X ..... ing under erstwhile Tariff Item No. 14F : that M/s. Lakme Ltd. (hereinafter referred to as the said company) created three units in the name and style as M/s. Sanjay Steel Co., M/s. Zenith Enterprises and M/s. Shalin Cosmetics for manufacture of Lakme brand Talcum Powder. The Department alleged that the intention of creating the said units was to avail undue benefit of exemption under Notification No. 140/83, dated 5-5-1983. The Central Excise Officers on receipt of some information visited the factory premises of these three units and found that the units were functioning in the godown wherein steel products were stored: that trading in iron and steel products was the main business of three units; that no signs of manufacturing activities were found; that on scrutiny of the records of these units, it was found that the units had worked for one month or so and manufactured Lakme brand talcum powder to remain within exemption limit of Notification No. l40/83. 4. It was alleged in the show cause notice that the said company was the real manufacturer and the units were only dummy units of the said company. Shri Manish Bhai R. Patel, in his statement, recorded on 20-10-1986 depos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the respondents. 6. On the question whether the three units were dummy of the said company the learned Counsel submitted that M/s. Lakme Ltd. was not engaged in the manufacture of Talcum Powder in 1986 or in the preceding years; that M/s. Lakme Ltd. did not create the three dummy units; that the three units did not manufacture talcum toilet powder in the same godown but in different premises; that all the three units were not engaged in trading activities; that manufacture of talcum powder was a simple process not requiring any sophisticated machinery or expertise; that if the firms for their internal reason stopped manufacture, or even if the three firms stopped manufacture on reaching the duty exemption slab, that fact cannot lead to the conclusion that they were not independent manufacturers; that if the firms did not sell their products to any other party, it does not mean that they were dummies or hired labourer of the said company; that there are numerous binding decisions on the issue; that a manufacturer sells his entire production to a single buyer and puts the buyer's brand name on the goods; that does not make the manufacturer, an agent or employee or dummy of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by M/s. Lakme Ltd.; that M/s. Dhiraj Can Co., Ankleshwar had written a letter to M/s. Sanjay Steel Co., Ahmedabad that the return of the above consignment was an arrangement between M/s. Lakme Ltd. and as such no freight involved in this respect can be paid by us; that this reveals that the entire portion was under the control and supervision of M/s. Lakme Ltd.; that the price charged by the three units cannot be accepted under Section 4 of the CESA, 1944. 9. On careful consideration of the submissions made by both sides and the documents referred to , we find that the three units got activated only for a short period of one month or so. We also find that the main activity of the three units was trading activity in steel products. We also find that the three units do not have permanent machinery. We also observe that machinery was taken on hire only for the manufacture of lavender beauty talcum powder. We also find that this arrangement was done through Consultancy Agency which were connected with M/s. Lakme Ltd. We also observe that when the officers visited the premises declared by the three units, there was no plant, no machinery, no raw material or finished product whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellants of any fact from the Department. He therefore, submitted that the demand beyond six months cannot be enforced under the provision of Section 11A of CESA, 1944. We find that the period for which the demands have been raised is between 26-12-1985 to 20-1-1986 of M/s. Zenith Enterprises, 30-1-1986 to 21-2-1986 for M/s. Sanjay Steel Co. and 26-2-1986 to 16-3-1986 for M/s. Shalin Cosmetics whereas the show cause notice was issued on 6-9-1990. We also observe that in the show cause notice, there is an imputation that there was suppression of material facts and misstatement inasmuch as the three units did not disclose that they were manufacturing the product for M/s. Lakme Ltd. The learned Counsel for the appellants agitated before us very forcefully that the three units had submitted the declarations which were required under the law and that in view of that declarations there was no suppression as the product was clearly declared. But here we are not considering whether the product was clearly declared or not. We are considering whether the relationship between the three units and M/s. Lakme Ltd. was at all disclosed or not. Specifically in view of the fact that there was ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
