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TMI Blog2002 (6) TMI 246X X X X Extracts X X X X X X X X Extracts X X X X ..... cers after vesting the Creative Industrial Estate on 15-3-90 and subsequent search of their premises of Appellant No. 1 on 17-3-90 at Commerce Center; that at the time of visit of the godown, no activity was going on there; that in fact the premises was closed indicating it was only a godown; that the tools that were found at godown were one tool box consisting of soldering irons, cutters and screw drivers (2 sets each); that no tools were found at Commerce Center Office; that no finished goods or components were found at Office; that the adjudicating authority has confirmed the demand of Central Excise duty and has imposed penalty on the ground that the appellants have assembled telephones, telex machines and EPABX Exchanges. The learned Advocate, further, submitted that the impugned order has been passed on the basis of assumption and presumption; that Creative Industrial Estate premises was taken on rent on 19-3-1989 and, therefore, the question of raising the demand from the year 1986 does not arise as obviously no manufacturing activity took place in the said premises earlier to the said period; that as the show cause notice refers to sale and purchase from 1986 onwards, it is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y were connected for testing purposes; that telephones are not commercially marketed in an assembled condition and this has been confirmed by Chartered Engineer and Assistant Engineer, MTNL; that hand sets, key board, coil cord and jack box cannot be manufactured without plastic making machine or coil making machine; that similarly base units, key board, monitor, printer and cable for Telex machine cannot be manufactured without the basic raw materials and sophisticated machinery; that EPABX system consists of monitor, power supply, voltage stabilizer, main distributor and printed circuit board and EPABX system is not supplied in an assembled condition and cannot be manufactured with a set of tools found in godown; that all these goods were lying in their godown premises in different packages. He also mentioned that Shri Mahesh Dave, in his very first statement dated 15-3-90, stated that they were trading in telecommunication equipments and gave the names of the manufactures; that Shri Shivaram Devadiga, godown keeper, has also stated in his statement that the materials were received in bin cards at one stage and subsequently they entered in the stock register and they were in full ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nge was found installed for testing goods; that Shri Shivram Devadiga was present at the premises and Shri Mahesh Dave, Accountant, reached there during the course of Panchnama. He further, submitted that the goods in respect of which the appellants had produced bills of entry were released; that the benefit in respect of traded goods has also been extended to them; that the appellants were manufacturing/assembling computerized telex system in both the premises; that they received orders and quotations for telex system and as specimen copies of the orders from M/s. Standard Tin Works and Saipem, Italian Stock Co. were enclosed; that Uttam Jain, in his statement dated 26-3-90 had deposed that different components of the telex systems were received and telex systems were delivered under regular delivery challan for installation at Customers premises; that Shri R.T. Chittanand corroborated the same under his statement dated 17-3-90 wherein he stated that for telex system they needed base units, visual display unit, printer and key board and sometime when customers wanted floppy drivers were also supplied; that systems are assembled, packed and cleared from Creative Industrial Estate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... opened in Panchas presence; that M/s. Fulchand Sons, in their letter dated 9-7-90 addressed to Superintendent had clearly mentioned that the premises was given to the appellants only in 1989 and as such demand of duty, if any, cannot be demanded from them from 1986; that Chittanand, in his cross-examination clearly deposed that assembly means connection. He also referred to page 255 of the Paperbook which gives the monthwise figure of purchases made by them in the financial year 1989-1990 (Rs. 3.74 crores) and submitted that on the basis of these figures, Sales Tax Department had considered these goods as re-sale items; that it is for the Department to establish that the manufacturing activity was taking place and these were the goods that were actually assembled and the onus of proving is on the Department. 7. We have considered the submissions of both the sides. The duty of excise is levied and collected on goods produced or manufactured. The adjudicating authority has confirmed the demand of duty and imposed penalty holding that the appellants have manufactured telephones, telex systems and EPABX Systems mainly on the basis of statement of R.T. Chittanand, attendance she ..... X X X X Extracts X X X X X X X X Extracts X X X X
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