1982 (2) TMI 69 - HC - Central Excise

Summary

Issues:
1. Claim for exemption from excise duty under Notification No. 208/77-CE.
2. Dispute regarding manufacturing and sale of radio sets to Gramophone Company.
3. Allegation of being "related persons" under Section 4(4)(e) of the Central Excises and Salt Act.
4. Interpretation of exemption notifications - No. 208/77-CE and No. 158/77-CE.

Analysis:

1. The petitioners, a company engaged in manufacturing radio sets, tape recorders, etc., sought exemption from excise duty under Notification No. 208/77-CE. The notification required compliance with specific conditions, including the value of each radio set not exceeding Rs. 165 and the total capital investment in the industrial unit not exceeding Rs. 10 lakhs. The petitioners satisfied these conditions, making them eligible for the exemption.

2. A dispute arose when the petitioners accepted an order from the Gramophone Company to manufacture and sell radio sets. The respondents contended that the Gramophone Company should be considered the manufacturer due to branding, potentially affecting the petitioners' exemption claim. However, the court held that the Gramophone Company was not the manufacturer, as the goods were manufactured by the petitioners in their industrial unit, meeting the exemption criteria.

3. The respondents also argued that the petitioners and the Gramophone Company were "related persons" under the law, impacting the exemption claim. The court rejected this argument, stating that the industrial unit where the radios were manufactured was distinct and eligible for exemption. The court referenced a previous judgment to support this conclusion.

4. Additionally, the respondents raised the issue of Notification No. 158/77-CE possibly affecting the petitioners' claim. However, the court found that the petitioners were specifically relying on Notification No. 208/77-CE for exemption, and there was no basis to apply the provisions of a different notification. The court upheld the petitioners' right to claim exemption under the relevant notification.

In conclusion, the court ruled in favor of the petitioners, quashing the demands and notices issued by the respondents. The court granted a writ of certiorari, mandamus, and prohibited the respondents from imposing additional requirements on the petitioners. The petitioners were entitled to costs, and their exemption claim under Notification No. 208/77-CE was upheld based on the fulfillment of prescribed conditions.