TMI Blog1990 (11) TMI 246X X X X Extracts X X X X X X X X Extracts X X X X ..... they pack it before despatching to their customers. 2.1A. Before 15-1-1983 the assessee had included the value of the crankshafts manufactured on their behalf by the outside manufacturers and they were paying duty and the value of the crankshafts was also taken into account while computing the exemption limit of Rs. 30 lakhs in terms of Notification 105/80 dated 19-6-1980. Prior to 15-1-1983 the assessee were in fact availing the facility of procedure under Rule 56B for which they requested vide their letter dated 24th December, 1981 addressed to the Asstt. Collector of Central Excise, Rajouri Garden, New Delhi. The said Asstt. Collector vide his letter dated 13-1-1982 permitted the assessee to effect the clearance of semi-finished crankshaft for further processing to the premises of M/s. Sahyadri Automotive Product Pvt. Ltd., Industrial Area, Pune under their usual gate passes and challans and to bring the finished goods back to their factory for further clearance thereof till they cross the clearance of Rs. 30 lakhs, whereafter the permission was granted subject to the observance of the procedure contained in the provisions of Rule 56B ibid read with the trade notices. 2.2 Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 30 lakhs in terms of the said Notification 105/80 dated 19-6-1980 for that year and since the value of the goods cleared by the assessee or on their behalf during the year 1982-83 had exceeded Rs. 40 lakhs, the assessee was not also entitled to the exemption from payment of duty leviable on the goods manufactured by them during the year 1983-84 vide Notification No. 77/83 dated 1-3-1983. 2.5 A show cause notice was, therefore, issued to the assessee on 21-9-1983 asking them to show cause to the Collector of Central Excise as to why (i) duty of Rs. 200649.32p should not be demanded from them under Rule 9(2) of the Central Excise Rules and (ii) penalty should not be imposed under Rule 173Q. 2.6 After due adjudication the Collector has confirmed the said amount of duty subject to entitlement of the assessee to the benefit of Notification 167/79-C.E., dated 19-4-1979 pertaining to supply of automobile parts to original equipment (OE) manufacturers. However, no penalty has been imposed on the assessee inasmuch as the assessee did not indulge in hide and seek with the department nor there is a case of intentional and wilful misdeclaration or evasion, on the part of the assessee. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m outside on their behalf but no duty is being paid under T.I. No. 68 of Central Excise Tariff. That these cankshafts were originally imported in their crude cast form and countervailing duty paid under erstwhile item T.I. 26AA as iron and steel castings, after due grinding, processing and machining, the goods assumed a different shape as identifiable motor vehicle parts and attract duty under Tariff Item 68 which has at no stage been paid". The aforesaid findings of the Collector have not been rebutted by assessee. Forging of a crankshaft as imported is totally a new commodity different from the one brought into existence namely, crankshaft manufactured by the outside job workers. It cannot, therefore, be held as contended by the assessee that no manufacturing has taken place when forged crankshafts are finished in crankshafts. A forging is obviously not an automobile part; a lot of machining, grinding etc. is to be done before it becomes an automobile part. Countervailing duty was also levied under a different T.I. 26AA CET and not under T.I. 68 under which the finished product crankshaft is finally chargeable to duty. It is, therefore, held that a new product involving the pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was the assertion of the appellants, as well as before the adjudicating authority and it is so in the appeal memo that these fabricators were doing their independent work not only for the appellants but also for others. The mere fact that some of them have wound up their business would not lead to an inference, as appears to have been hinted at in the impugned order that such fabricators were agents of the appellants. It is for the department to prove by cogent and acceptable evidence that the fabricators were actually puppets in the hands of the appellants. Leave apart production of any cogent evidence there is absolutely no evidence on record to even hint at in that direction. The adjudicating authority has merely relied upon the interpretation given by him to the definition of manufacturer under Section 2(f) of the Central Excises and Salt Act. In view of the series of judgments on this issue we disagree with the interpretation of the Collector. 4.3 While general proposition made by the assessee s learned advocate is not disputable the facts in this particular case have also to be taken into account. It is admitted to the assessee that they were availing the facility of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the following terms :- The Assistant Collector, Central Excise, MOD. III, New Delhi is pleased to grant permission to the effect that semi-finished crankshafts may be cleared by you for further processing to the premises of M/s. Sahyadri Automotive Product Pvt. Ltd., Industrial Area, Pune under your usual gate passes/challans and bring the finished goods back to your factory for further clearance thereof till you cross the clearance of Rs. 30 lakhs, whereafter permission is granted subject to the observance of the procedure contained in the provisions of Rule 56B ibid read with Trade Notices. Accordingly, the clearance of crankshafts by the assessee during the financial year 1982- 83 up to 15-1-1983 should be counted for the purpose of computing the benefit of Notification 105/80 dated 19th June, 1980 and as superseded by Notification No. 77/83 dated 1-3-1983. 4.4 However, as regards the clearances of crankshafts after 15-1-1983 are concerned, it is apparent that the assessee ceased to be the manufacturer. He has no doubt supplied the forged crankshafts to the outside job workers for converting them into finished crankshafts and has been bringing them back for the purpose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upplied material (other than crankshaft) to O.E. manufacturers of the value of Rs. 6 lakhs up to November 1982 without following complete Chapter X procedure, G.P.I s Certificates from O.E. manufacturers such as Mahindra Mahindra and Simpson Co. have been submitted for the above value. The Assistant Collector did not exclude the above value of 6 lakhs only on the ground of non-fulfilment of Chapter X procedure. Collector (Appeals) has held that the appellants were entitled to the benefit of O.E. clearances in terms of Notification No. 167/79. Therefore, the total value of excisable clearances during 1982-83 would now be :- + 44,07,909.51 - 9,46,652.00 - 6,00,000.00 28,61,257.51 which is well within the exemption limit of Rs. 30 lakhs under Notification No. 105/80. Therefore, the demand cannot be sustained. I would therefore propose that the appeal be allowed with consequential relief of refund of Rs. 1 lakh immediately. B. Appeal relating to refund - E/1786/86-B1 In view of the above finding that the clearances during 1982-83 are less than Rs. 40 lakhs, I would propose an order dismissing the appeal and directing immediate grant of refund. In view of the maj ..... X X X X Extracts X X X X X X X X Extracts X X X X
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