TMI Blog1993 (12) TMI 212X X X X Extracts X X X X X X X X Extracts X X X X ..... from their factory. According to the Department, a thorough scrutiny of records revealed that M/s. Elgi Tyre Tread Limited supply raw materials including packing materials and identification slips under delivery challans and get back bonding gum on job order basis at the rate of Rs. 1.50 per kg. The job worker M/s. Super Analysers Private Limited, Ganapathy cleared the above products on payment of duty by availing concession under Notification No. 56/88, dated 1-3-1988 as amended. This excise duty was also paid back by M/s. Elgi Tyre Tread Limited. This above method was effected from 1-3-1989 onwards. 2. The officers also visited M/s. Santha Raghu Industrial Products, L4 No. 1/Ch. 40/89, Coimbatore-28 and verified records. This unit obtained licence in August, 1989 and started manufacturing Bonding gum falling under Chapter 4006.10. They also do it on job order basis on behalf of M/s. Elgi Tyre Tread Limited, Coimbatore on getting Rs. 1.50 per Kg. as labour charge. The raw mate rials including packing boxes and identification slips are supplied by M/s. Elgi Tyre Tread Limited, Coimbatore by their delivery challan and job order. This unit is also availing concession under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngaged the other job workers in order to avail of the concessional rate of duty to which they themselves, being a large scale unit, were ineligible. He, therefore, confirmed the demand of duty as stated in the show cause notice under Rule 9(2) read with Section 11A of the Central Excises and Salt Act, 1944. He also imposed a penalty of Rs. 10,000/- each on the three appellants, herein. 6. Shri Laxmikumaran, the ld. Counsel appearing for the appellants submitted that the Collector himself in his order in para 21 thereof has clearly given a finding that M/s. Super Analysers Private Limited and M/s. Santha Raghu In dustrial Products were the manufacturing units by their own right which is not disputed. If this is the case, then when these units were manufacturing, on their own, as an independent unit, their clearances cannot be clubbed with that of M/s. E.T.T.L.. He relied upon the Supreme Court decision in the case of Collector of Central Excise v. Kerala State Electricity Board reported in 1990 (47) E.L.T. A161 wherein the Supreme Court has dismissed an appeal by the Department against the Tribunal s decision in the case of Collector of Central Excise v. Kerala State Electricity B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om two streams, namely, one from M/s. E.T.T.L. from their units at Pondicherry and Hindupur and the other from small-scale units like the other two appellants, herein which is clearly untenable. The ld. Joint CDR pointed out that for manu facture on behalf, there is a separate Notification No. 305/77 which envisages a main manufacturer and subsidiary units which has not been availed of here. He also relied upon the Supreme Court decision reported in 1986 (25) E.L.T. 609 and that reported in 1977 (1) E.L.T. 168 to say that the job working units are merely the hired labour working for the main manufacturer, M/s. E.T.T.L.. 8. We have carefully considered the submissions made by both the parties, herein. The Collector s order seeks to deny the exemption under Notification No. 56/88 to the job workers and to demand full duty based on the circum stances that the appellants, E.T.T.L. had supplied all the raw materials for the manufacture of bonding gum by these units and the final product is received back by the appellants, M/s. E.T.T.L. on job work basis on payment of duty at concessional rate by the job workers. The Collector also has considered the fact that M/s. E.T.T.L., themselve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to have employed the other units as hired labour. Therefore, applying the ratio of the above said decisions of the Supreme Court and the Tribunal, in the facts of the present case, there is a lot of force in the contentions of the appellants and accordingly the impugned order is set aside and the appeals are allowed. Sd/- (K.S. Venkataramani) Member (T) Dated 13-9-1991 9. [Contra per : S.L. Peeran, Member (J)]. - I have gone through the order proposed by my learned brother Shri K.S. Venkataramani but to my regret, I am unable to agree to the same. 10. The learned Collector has held in Paras 21 to 27 of his order as follows :- While defending the case, both the parties, namely, M/s. Super Analysers Pvt. Ltd. and M/s. Santha Raghu Industrial Products have been vehemently arguing that they should be treated as independent manufacturers. In support of their claim they have cited a large number of judicial and Tribunal pronouncements. There is no doubt that these units are manufacturing units by their own right. This is not disputed. The real dispute is whether they are eligible to avail the benefit of Notification No. 56/88-C.E., dated 1-3-1988. It is w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed far more than Rs. one and a half crores. Such an interpretation alone would justify the clauses of the notification when read together. The parties have argued against the Department s action in invoking the extended time-limit available under Section 11A of the Central Excises and Salt Act, 1944. Since, it is accepted that M/s. Super Analysers and M/s. Santha Raghu Industrial Products are manufacturers by their own rights and, as admitted by them that they were manufacturing bonding gum out of the raw material supplied by M/s. Elgi Tyre Tread Limited in their trade name and according to their quality requirement etc., certain amount of responsibility is cast on them. If these two units were to manufacture bonding gum of their own brand name, quality etc., there is absolutely no dispute that they can avail the concessional rate of duty subject to the conditions mentioned therein. But, in the instant case it has been admitted that they were manufacturing bonding gum out of the raw material supplied by M/s. Elgi Tyre Tread Limited and also packed and returned to them in the packing material supplied by M/s. Elgi Tyre Tread Limited. Their only consideration was job charge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exercise of the powers conferred by sub-rule (1) of rule 8 of the Central Excise Rules, 1944 and in supersession of the notification of the Government of India in the Ministry of Finance (Department of Revenue) No. 83/83-C.E., dated the 1st March, 1983, the Central Government hereby exempts the excisable goods of the description specified in column (3) of the Table hereto annexed and falling un der such item number of the First Schedule to the Central Excises and Salt Act, 1944 (1 of 1944), as is specified in the corresponding entry in column (2) of the said Table (hereinafter referred to as the specified goods ) and cleared for home con sumption on or after the 1st day of April in any financial year, by or on behalf of a manufacturer from one or more factories. 13. The first para of Notification No. 119/75, dated 30-4-1975 is also reproduced below :- In exercise of the powers conferred by sub-rule (1) of rule 8 of the Central Exercise Rules, 1944, the Central Government hereby exempts goods falling under Item No. 68 of the First Schedule to the Central Excises and Salt Act, 1944 (1 of 1944), manufactured in a factory as a job work, from so much of the duty of excise leviabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e cases that in M/s. V. Anand Others case, the notification in question was No. 175/86, dated 1-3-1986 and Notification No. 85/85-C.E., dated 17-3-1985. The notification in M/s. Fushion Polymers Ltd. was No. 119/75-C.E., dated 30-4-1975 and in the case of Kerala Electricity Board , the notification was 179/77 dated 18-6-1977. Thus in this case, the notification in question No. 56/88 as amended by Notification No. 44/89 dated 1-3-1989 has introduced further words or from any factory by one or more manufacturers. 17. There is no doubt that under the earlier notification, the appellants would be clearly entitled to the benefit of those notifications by applying the ratio of M/s. Anand s case, Fushion Polymers s case and Kerala State Electricity Board s case. But after the Notification No. 56/88 as amended by Notification No. 44/89 dated 1-3-1989, the appellants can no longer enjoy these benefits. The introduction of these words or from any factory by one or more manufacturers include job workers, who are considered as independent manufacturers. The clearances of M/s. Elgi Tyre Tread Limited has to be clubbed along with those of the clearances of the job workers manufactur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he following difference of opinion between two members : Whether in the facts and circumstances of the case, the Collector was right in holding that E.T.T.L. branded bonding gum was manufactured at Hindupur and Pondicherry and Coimbatore units (though belonging to different manufacturers) constitute the same commodity and the same brand and the two units were doing manufacture on behalf of the other units, and on this reasoning whether the Collector was right in denying the exemption under Notification 56/88, as amended by Notification 44/89 to appellants Super Analysers and Santha Raghu Industrial Products for the reason that the total clearances of all the units taken together have exceeded 1 crore based on interpretation of the wording in the Notification which refers to clearances in the financial year by a manufacturer from one or more factories, or from any factory by one or more manufacturers; Or Whether the two appellants, M/s. Super Analysers and Santha Raghu Industrial Products being admittedly independent manufacturers on their own, as found by the Collector in his order, are entitled to exemption on their clearances under Notification 56/88, as amended by Notifi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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