9911796707
TMI Blog2000 (6) TMI 245X X X X Extracts X X X X X X X X Extracts X X X X ..... e appellants had removed AMS in bulk packing of 25 Kgs from their factory at Mandideep for packing them further in sachets of 20 gms. and 30 gms. to the premises of M/s. Industrial Enterprises (Detergents), Kanpur ("IED" for short) and the duty paid by the appellants on the 25 Kg bulk packing on the basis of price declared on 25 Kg bulk packets from Mandideep on the basis of cost thereof was not the correct duty leviable on the goods and the appropriate duty to be levied on the goods was the duty on AMS in the condition in which it emerged after its packing by IED at Kanpur on the price of AMS of 20 gms. and 30 gms. sachets. The Show Cause Notice (SCN) dated 10-6-94 alleged that IED, Kanpur did not have a separate identity or existence other than that of an 'extended arm or facility' of the appellants since IED, Kanpur which was set up by the appellants in 1990 was provided with the plant and machinery for the manufacture of AMS and for packing of AMS by the appellants themselves and the appellants had also met the expenses incurred by IED in connection with erection and installation of plant, machinery, fabrication, etc. The machines which were supplied by the appellants free of c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nnection drew attention to the fact that the value of bulk packs had been finally approved by the Commissioner, Indore as declared in the price list filed in Proforma VII for captive consumption and not for sale. This had also been supported by the Chartered Accountant's certificate. The third point raised related to the merits of the case and the claim of the Department that the appellants were liable to pay duty on the 20 gms. and 30 gms. packs on the ground that IED is only an 'extended arm' of the appellants. It was argued on behalf of the appellants that during the period under dispute the only activity carried on by IED at Kanpur was repacking of bulk packs of 25 Kg into small sachets of 20 gms. and 30 gms. which activity was admittedly not 'manufacture' within the meaning of Section 2(f) of the Central Excise Act, 1944 at the relevant time. No excise duty was therefore leviable on the 20 gms. and 30 gms. sachets and accordingly the question whether IED was an arm or an extension of the appellants was irrelevant. Further, there was also no question of any suppression of information on the part of either the appellants or IED to justify the invoking of the proviso to Section 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellants from Mandideep in 25 Kg bulk packs on payment of duty to IED for re-packing into 20 gms. and 30 gms. sachets. The packing of 20 gms. and 30 gms. sachets was undertaken by IED, Kanpur on job work basis. Before commencing the packing operations of the goods into 20 gms. and 30 gms. sachets, IED Kanpur had sought clarification from the Asst. Collector, Kanpur on the question whether packing and re-packing of duty-paid AMS amounted to manufacture and the Asst. Collector had by letter dated 11-11-91 informed IED that no duty was leviable on re-packing of duty-paid detergent powder. Thereafter IED by letter dated 26-11-92 had informed the Asst. Collector, Kanpur that they had entered into a contract with the appellants for re-packing of duty paid detergent powder from bulk packing into smaller packs and since re-packing did not amount to manufacture, IED was not liable to pay excise duty. Subsequently by letter dt. 5.3.93 IED had also informed the Department that they had stopped manufacturing operations and therefore, they were surrendering their L.4 Licence. 7. Ld Counsel contended that it was an admitted position in the present case that there was no sale by the appellants ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal and for setting aside the impugned order. 8. Ld. JDR, Shri S. Srivastava submitted as under: There was no dispute on the facts of the case viz., that the appellants had cleared detergent powder in bulk of 25 Kg packs from their factory at Mandideep for repacking into smaller sachets by IED at Kanpur. However, the smaller sachets were also sold by the appellants themselves. There was no change of ownership of the goods at any time and it remained with the appellants as there was no sale when the goods were transferred to Kanpur from Mandideep. The appellants' contention that the repacking done by IED at Kanpur was on job work basis is without merit. IED Kanpur was in fact only an 'extended arm' of the appellants as was evident from the factual position appearing from the records as well as from the statements given by the Officers of the appellant firm and IED to the effect that the plant and machinery located at Kanpur and operated by IED remained the property of the appellant and that IED did not reimburse any amount for utilisation of the plant and machinery. Further, the manufacture was done under the quality control supervision of the appellants and as per agreement be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yment of duty. Had this information been given at the time of filing the Price List, the Department would have been able to raise objection to the method of valuation adopted by the appellants. Ld. JDR submitted that the contention of the appellants that the Asst. Commissioner, Kanpur had clarified that repacking of detergent powder by IED at Kanpur would not amount to manufacture amounted to knowledge on the part of the Department cannot be accepted. First of all, the appellants had not disclosed full facts to the Asst. Commissioner at Kanpur. Secondly the said information was suppressed from the proper Officer at Bhopal within whose jurisdiction the goods were manufactured in the first phase. The valuation arrived at by the assessing authorities at Indore was on the basis of insufficient information and on the basis of suppressed information about the goods being sent for repacking in smaller sachets at Kanpur. Therefore, the earlier valuation having been made on a wrong basis, re-determination of duty payable on the goods worked out on the basis of depot price of the smaller packs of 20 and 30 gms. subject to applicable deductions such as transportation charges was fully justifi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orted at Mangalore Port but seized at a place falling within the Jurisdiction of the Bombay Commissioner, since Section 47 of the Customs Act conferred jurisdiction for issuing SCN and for passing the order of adjudication only on the competent Officer having territorial jurisdiction over the place of import/clearance. The Tribunal had however upheld the Jurisdiction of the Collector of Customs, Bombay to decide on the question of clandestine removal of the goods. 10. We find that reliance placed by the appellants on the aforesaid decisions regarding jurisdiction do not advance their case inasmuch as the question to be decided in the instant case is different from those cases inasmuch as the instant case relates to valuation of goods initially cleared from the appellants' factory falling within the jurisdiction of the Commissioner, Indore and not in relation to a job work or importation of goods. It is true that the Department has not questioned the clarification given by the Asst. Commissioner, Kanpur on the question whether repacking of the goods in smaller sachets amounted to manufacture or not. This does not however take away the jurisdiction of the Commissioner, Bhopal to i ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
