TMI Blog1999 (3) TMI 636X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the aggregate value of clearance under Notification No. 175/86. 2. Briefly stated the facts are that the appellants manufactured medicine and availed benefit of SSI exemption under Notification No. 175/86, dated 1-3-1986. They had also entered into agreement with certain other manufactures in Bombay and Hyderabad Collectorate jurisdiction for manufacture of medicines as loan licensee out of raw materials supplied by them as per appellant s specifications, requirements and bearing their trade mark and brand name. The Collector, Central Excise, in the impugned order, confirmed the demand of Central Excise duty amounting to ₹ 23,15,432.26 and imposed a penalty of ₹ 10,000/- holding that the appellants were the manufacturers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lants on a principal to principal basis; the products would be manufactured in accordance with the standards of specifications and as per the quality control standards, specified by the appellants; that nothing in Agreement would constitute or demand to constitute to either party as the Agent of the other; that the manufacturer was free to sell similar products to other parties. The ld. Advocate further submitted that the said manufacturers had been duly assessed to excise duty in respect of the products manufactured and supplied by them; that the appellants were merely a trader and accordingly turn over of these goods could not be clubbed with their (Appellants) turn over for the purpose of Notification No. 175/86; that the appellants cann ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ma, also relied upon by the Collector is not applicable as the facts are entirely different. In Duke Pharma s case different manufacturer manufactured the goods in the same factory and in view of para 3 of the Notification No. 175/86, all clearance was required to be clubbed along with the clearances of the factory owners. He also contended that as per Explanation IV to Notification No. 175/86 where the specified goods are affixed with a brand name of another manufacture or trader, such specified goods shall not, merely by reason of that fact, be deemed to have beenmanufactured by such other manufacturer or trader. He finally submitted that the demand issued under show cause notice dated 30-5-1994 for the period from 1989-1990 to 1990-1991 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s out of the raw materials supplied by them as per their specifications and under their brand name under agreement. The terms and conditions of the agreement reveal that the transactions between the appellants and the manufacturer of the medicines was on a principal to principal basis. The department has not adduced any evidence to show that the appellants were exercising control and supervision over the manufacturing activities in the premises of the manufacturers. There is no allegation contained also in the show cause notice that the appellants and the manufacturers of the product were related persons. The Apex Court in the case of Ujagar Prints v. U.O.I. [1988 (38) E.L.T. 535 (S.C.)] has held that excise duty is on the manufacture of go ..... X X X X Extracts X X X X X X X X Extracts X X X X
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