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TMI Blog2016 (3) TMI 474X X X X Extracts X X X X X X X X Extracts X X X X ..... ts do not attract central excise duty but during the period 1995-96, it was noticed by the Department on the basis of some investigations that the appellant has manufactured certain excisable goods viz. M.S. Receivers, Storage Tanks, Fermentation Tanks, Condensers, Grain Griding Mills, M.S. Coolers, etc. and removed the same without payment of duty. It was also observed that the appellant had not followed the procedure prescribed as per Central Excise Rules. It was also found that the appellant set up various dummy and benami firms by showing the supply of the goods from these dummy units obtained lease/hire-purchase finance on such goods from various finance companies. The amount of lease/hire-purchase finance was routed through various ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellant could not have raised such lease finance independently and were facing acute financial crisis. Money so obtained has been duly accounted for in the books of accounts of the appellant. As per the scheme, the invoices were raised on the appellant by these three firms for various lease/hire-purchase companies. It is his contention that these invoices were raised only for the purpose of raising working capital and not for any transaction of sale of the goods to the appellant. It is also his contention that the goods shown in the invoices were merely paper transaction and the same were accounted for in the books of accounts. Therefore, the Department has raised the demand on assessment that the appellant in their factory have manufactured ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, it is an admitted that the M/s. Basna Engineering Works and M/s. K.L. Engineering Works fabricated fermentation tanks in the factory of the appellant. In that case, contractors are the manufacturers of the goods, therefore, the duty cannot be demanded from the appellant. To support to his contention, he relied upon on the decision of the Tribunal in the case of AFL Pvt. Ltd. v. CCE, Mumbai-II reported in 2013 (295) E.L.T. 211 (Tribunal-Mumbai). Therefore, he prayed that the impugned order is to be set aside. Consequently, the penalties are also not sustainable. 3. On the other hand, ld. DR submits that the allegation against the appellant is that they have manufactured and removed the excisable goods by engaging contractors as they ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e got financed by the dummy and benami Units created by them and they have procured raw materials for manufacturing of capital goods and they have manufactured as the said capital goods were not found at the time of visit in their factory. Therefore, it is alleged that the appellant have removed the said capital goods clandestinely. In fact, it is admitted fact by the Revenue that the appellant has procured capital goods on hire-purchase/lease basis from these dummy units when it is on record that the appellant has entered into transactions with dummy units, therefore, invoices raised by these dummy units cannot be the basis for procuring capital assets in their factory. Moreover, the demands proposed to be raised by Revenue on the basis of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to be demanded from the contractor and not from the appellants. Same view has been taken by the Tribunal in the case of AFL Pvt. Ltd. v. CCE, Mumbai-II (supra), wherein this Tribunal in Para 14 of the order has held as under : - 14. On the contrary in the case of Diamond Cements Ltd. v. CCE, Bhopal - 2012 (283) E.L.T. 226 (Tri.-Del.) the Tribunal held that merely because the appellants were supplying the raw material and was exercising supervisory quality control over the goods, it cannot be held that the contractors were actually hired labourers especially when the contractors have admitted having fabricated the goods for and on behalf of the appellants. Similarly, merely because the said fabrication was being done by the contract ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ses of the assessee. No doubt the sale proceeds went to the respondents but that will not change the character of manufacture. If the conclusion is that the house-hold ladies were the real manufacturers then the decision of the Tribunal cannot be faulted. In the case before us, although the said goods were manufactured by M/s. Raigad at the premises hired by the appellant from BPT that the machineries of M/s. Raigad under the supervision of supervisors appointed by the appellant. On the basis of above discussion, it cannot be held that the appellants are the manufacturers. Only M/s. Raigad are the manufacturers. Therefore, on this ground alone the appellants succeed." 8. Therefore, we hold that the demand of Rs. 1,11,67,833/- is not s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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