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TMI Blog1982 (4) TMI 279X X X X Extracts X X X X X X X X Extracts X X X X ..... , namely Phoolan Agricultural Industries, Baraut (hereafter P.A.I. ) and Phoolan Foundary Works, Baraut (hereafter P.F.W. ). During the period from 1-3-1975 to 31-3-1978 these two firms manufactured A.D.V. (Animal Drawn Vehicles) wheels and axles under Item 68 of the Central Excise Tariff ( C.E.T. ). They did not obtain a C.E. licence or observe the other formalities under Central Excise law. The firms also did not pay the duty leviable on their products during this period. The firms were requested by the jurisdictional Inspector to furnish certain information regarding their duty liability but they failed to do so. In the absence of information from the firms the Department worked out the duty liability on the basis of figures supplied b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the personal hearing granted by the Board to the appellants on 24-4-1982, Shri R.K. Jain, Excise Consultant appeared on behalf of all the three appellants. 7. The Consultant submitted that P.A.I. and P.F.W. were registered separately under the Partnership Act, Income-tax Act and Sales Tax Act. 8. The goods produced were in the nature of agricultural implements exempted under Notification No. 55/75-C.E., dated 1-3-1975. 9. Moreover, the classification of the goods manufactured by these firms was pending in appeal before the Appellate Collector, Central Excise, New Delhi and hence the Collector s order was without jurisdiction. 10. The Consultant also submitted that the goods in question were produced by the firms and not by the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncorporated in the first proviso to Notification No. 176/77-C.E.. The productions of these two units can only be clubbed for the period from 18-6-1977 to 31-3-1978 in view of the specific provisions in the second proviso to the Notification. According to him the Collector has erred in treating the firms as one manufacturer though there were two different factories, registered separately with the Directorate of Industries, Income-tax and Sales Tax Department. 13. He cited the judgment of the Supreme Court in the case of Commissioner of Sales Tax v. Radhakrishnan and others (1979 SC 43 (STC)-4) and in the case of State of Punjab v. Jullundur Vegetable Syndicate (1976 SC (17) STC-326). 14. The Consultant also urged that the Collector ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s the Board observes that merely because the two concerns had common partners would not vitiate the position that these two concerns had separate existence and legal entities quite different from the partners of the two concerns who had also separate existence and legal entities of their own. 21. In these circumstances PAI and PFW had to be treated as separate manufacturers and their production or clearances could not be combined treating them as by or on behalf of a manufacturer for the purpose of exemption under Notification No. 176/77-C.E., dated 18-6-1977 (as amended). 22. The Boards, however, observes that action in this case has been directed against the three common partners (i.e. the appellants) of the two concerns. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inds that the imposition of penalties on the three appellants was not justified and sets them aside. 32. The Board has on more than one occasion observed (the Orders have been published in Journals such as E.L.T. and D CR), about the casual manner in which penalties under Rule 173Q are imposed by Adjudicating Officers. The (ill-conceived) penalties in these three appeals is five lakhs with a multiplication factor of three. The Board (as already stated above) finds no warrant for such penal action. 33. The Board would once again like to make this observation in a different language Rule 173Q is not a toy-pistol. It can be lethal. 34. This Order of the Board does not preclude the Collector from taking any action deemed fit by him ..... X X X X Extracts X X X X X X X X Extracts X X X X
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