9911796707
TMI Blog2013 (12) TMI 87X X X X Extracts X X X X X X X X Extracts X X X X ..... be discharged by the appellants on the ground that M/s. Raigad, in fact, only hired labourers. Furthermore, the exemption from payment of excise duty as claimed by the appellant was denied on the ground that the said goods are not Ocean Going Vessels. 4. This is a 2nd round of litigation. In the earlier round, vide order dated 31-10-1996, the Tribunal has remanded the matter back to the Commissioner of Central Excise for de novo adjudication after considering relevant case law, notifications and trade notices relied upon by the appellants. In de novo proceedings the learned Commissioner upheld the demand of Excise duty and confirmed fine and penalty in lieu of confiscation as mentioned in paragraph 1 of this order. Against the said order, the appellants are before us. 5. The contentions of the appellants are as under :- (a) The appellants are not the manufacturers of the said goods as the same have been manufactured by M/s. Raigad. (b) In alternate, if it is held that the appellants are the manufacturer, then the said goods are exempted from payment of Central Excise duty. 6. Heard both sides. 7. Shri J. Poch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plier as held in the impugned order. 7.1 It is also contended that although as per the agreement in Clause 10, M/s. Raigad was required to discharge any Central taxes on the said goods and in turn the appellants have to reimburse the same. He further contended that as held by this Tribunal in the case of JCB India Ltd. - 2008 (12) S.T.R. 714 (Tri.) which was upheld by the Hon'ble Apex Court as reported in 2010 (18) S.T.R. J110 wherein it has been held that "by merely writing in an agreement that all central taxes would be payable by the appellants has no force in law inasmuch as no parties to a contract can contract themselves out of statutory provisions of law and any clause in an agreement contrary to law is not sustainable. 7.2 It is further contended that as per various statements recorded during the investigation, it is clear that the main raw materials (i.e. steel, tug engines, pipes, electrical material) were supplied by the appellant and M/s. Raigad supplied labour, tools, tackles, electrodes and electricity. It is also an admitted position that machines which were procured for manufacturing process are cutting machines run with the aid of power, welding machine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its that the Revenue has relied on one of the judgment of the Hon'ble Supreme Court in the case of Shree Agency v. S.K. Bhattacharjee - 1977 (1) E.L.T. (J168) (S.C.) which is against the judgment of Hon'ble High Court [2001 (124) E.L.T. 24 (Bom.)]. In that case, Shree Agency (supra) were engaging 16 looms owned by other for weaving of their yarn into fabrics during the period July, 1956 to April 1957. The judgment of the said case is not a good law as for the decision of the Hon'ble High Court of Gujarat in the case of Apex Electricals - 1992 (61) E.L.T. 413 (Guj.). The appeal against the said order was dismissed by the Hon'ble Apex Court - 2010 (254) E.L.T. A37 (S.C). 7.6 Further, the learned Advocate relied on the decision in the case of Metal Box - 1986 (23) E.L.T. 187 (T) wherein the Tribunal held that raw material supplier cannot be treated as manufacturer. The said judgment was upheld by the Hon'ble Apex Court in 1996 (81) E.L.T. A44 (S.C). In the case of Ashok Leyland - 1993 (68) E.L.T. 65 (Mad.) the Hon'ble Madras High Court after having considered Shree Agency (supra) held that raw materials supplier is not the manufacturer. 7.7 The learned Advocate further sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 28) E.L.T. 39 (S.C.) 4. V.M. Salgaonkar & Bros. (P) Ltd. - 1998 (99) E.L.T. 3 (S.C.) 5. Vipul Shipyard - 1985 (19) E.L.T. 122 (Tri.) 6. Bharati Shipyard (P) Ltd. - 1998 (101) E.L.T. 33 (Tri.) 7.9 He further submits that the demands for the period October 1986 to April 1987 are barred by limitation as the show-cause notice was issued on 31-7-1987. All the three barges were cleared during that period and the goods have been manufactured by M/s. Raigad. The appellants are having the support of CBEC instructions and the judgment of the Tribunal as well as the Hon'ble Apex Court. It is further submitted that all six tugs cleared during the period 16-1-1987 to 24-4-1987 were exempted above said notifications as clarified in Trade Notice 9/84. Hence the demand against the same are not sustainable although part of which is within time. 8. As demand is not sustainable against the appellant, therefore penalty is also not imposable as there is no indication of any mens rea or guilty mind on the part of the appellant. Therefore, impugned order is to be set aside and the appeal be allowed with consequential r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or manufacturing of the said goods, all the machineries were deployed and all consumables were supplied by M/s. Raigad like welding electrodes etc. 13. The facts of Shree Agency (supra), relied on by the Revenue, cannot be applied to the facts of this case as the issue before the Hon'ble Apex Court was that whether the duty is correctly determined or not wherein the appellant acted as master viewer and thereafter the Hon'ble Apex Court has held that by way of this appeal, the appellant cannot question that they are not manufacturer. This decision is no longer good law inasmuch as in catena of judicial decision delivered subsequently. Hon'ble Gujarat High Court in Apex Electricals - 1992 (61) E.L.T. 413 (Guj.) in para 17 after having considered the ratio in Shree Agency (supra) has held that job worker being not dummies or hired labourers, were the manufacturers, unlike in Shree Agency. The Tribunal in Aska Equipment (P) Ltd. - 2006 (202) E.L.T. 795 (T) in para 6 did not approve Commissioner's relying on Shree Agency for holding supplier of materials as manufacturer and appeal against this judgment by Dept. has been dismissed - 2010 (254) E.L.T. A37 (S.C). Further, the Tribuna ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sticks were put in packets and such packets were sold from the premises of the house-hold ladies and they did not go to the factory premises of the assessee. No doubt the sale proceeds went to the respondents but that will not change the character of manufacture. If the conclusion is that the house-hold ladies were the real manufacturers then the decision of the Tribunal cannot be faulted. In the case before us, although the said goods were manufactured by M/s. Raigad at the premises hired by the appellant from BPT that the machineries of M/s. Raigad under the supervision of supervisors appointed by the appellant. On the basis of above discussion, it cannot be held that the appellants are the manufacturers. Only M/s. Raigad are the manufacturers. Therefore, on this ground alone the appellants succeed. 15. Now we are dealing with the 2nd point whether the goods are sea going vessel or not. 16. As per the affidavit filed Shri Arun Kapur, Naval Architect, confirms the said tugs and barges are sea going vessels and the same is evident from the agreement with Indo Gulf wherein AMC Marcons also contemplates that the said goods should be constructed as sea going vessels. Ther ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
