TMI Blog1989 (11) TMI 51X X X X Extracts X X X X X X X X Extracts X X X X ..... list of items referred to 'Super Blucem'. A concessional rate of 2% levy was claimed by the petitioner under Notification No. 74/78 dated 1.3.1978. This classification list was approved by the Assistant Collector on 13.2.1984 with effect from 1.4.1983. Pursuant to the approved classification list, monthly returns were filed by the petitioner in Form RT 12 for the subsequent periods covered by the agreement and the petitioner was assessed on the basis of the approved classification list. 3. When matters stood thus, a show cause notice dated 15.9.1984 was issued to the petitioner as per Annexure 'F' proposing to revoke the approval and demand short-levy of 2% duty ad valorem. This notice was issuer invoking the proviso to Section 11A of the Central Excise Act, which permits initiation of action within five years from the relevant date, on the ground of fraud, wilful mis-statement and suppression of facts and the like. 4. A reply was filed to the said show cause notice as per Annexure 'G' and it was contended - that supply of Blucem made by the petitioner to M/s. Garware Paints Limited was on principal to principal basis covered by an independent agreement between the parties. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t was argued by the learned Counsel that Department's finding that there was short-levy on account of the failure of the assessee to supply full information at the time the classification list was approved, cannot be justified on facts. The learned Counsel has demonstrated that apart from filing the classification list, monthly returns were filed in Form RT 12 for the remaining period covered by the agreement and the assessments were completed on the basis of the approved classification list. It is also argued for the petitioner that along with the monthly returns in Form RT 12, invoices were filed showing that the entire cement paint manufactured by the petitioner under the brand name Blucem was supplied to M/s. Garware Paints. On the basis of these facts, it is argued by the learned Counsel that the Department could not have invoked the proviso to Section 11A that there was suppression of facts by the petitioner resulting in the short-levy. Sri Chander Kumar has produced some invoices, gate-passes and Delivery notes in support of the factual position. 11. It is also contended by the learned Counsel that the show cause notice is liable to be quashed, since it does not contain an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oes not contain the relevant ingredients and he relies upon the contents of the notice to show that the purport of the show cause notice was that the manufacture by the petitioner was for and on behalf of M/s. Garware Paints Ltd. and that therefore, the petitioner had erroneously availed of the concessional rate of duty for the brand name used on the goods manufactured and supplied during the relevant period. The learned Counsel also sought to support the findings recorded by the Assistant Collector relying upon the provisions of Sections 2(f) and 4(c) of the Central Excises and Salt Act, 1944, i.e., the definition of "manufacture" and the definition of "related person". The contention of the learned Counsel is that the petitioners have engaged labour and manufactured on behalf of the brand name owner. In support of his argument, he has relied upon certain clauses in the agreement viz., minimum off-take of 30 tonnes per month and the quality control exercised by the brand name owners and the finding of the Assistant Collector recorded in page 7 of the order that the Company advanced money to the petitioner at the rate of Rs. 2.50 per kg. or Rs. 75,000/- per month towards service ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... "for and on behalf of" found in the agreement entered into by the petitioner with M/s. Garware Paints Ltd. The respondent has considered the various clauses of the agreement and has come to his own conclusion resulting in the revoking of the approval. The Assistant Collector appears to have been wholly influenced by the phrase "for and on behalf of". There is no finding recorded by the Assistant Collector whether the manufacture by the petitioner was as an agent or contractor of the brand name owner. What cannot escape my notice is that the Assistant Collector had the agreement before him and has considered several clauses of the agreement for the purpose of withdrawing the approval. It is not his case that the agreement was not produced by the petitioner at the time the classification list was approved or any time thereafter. He is not sure about this position and observes that the petitioners do not seem to have produced any copy of the agreement during the period. All the same, he does consider several clauses of the agreement in particular by clause 11 of the agreement which provides for interest on over due payments and the supervision and control exercised by the brand name o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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