Commissioner of Central Excise Vs. Pearl Engg. Works

Commissioner of Central Excise vs Pearl Engg. Works

Type Court Judgment Court Customs Excise and Service Tax Appellate Tribunal CESTAT Delhi Decided Mar 04, 1999

~4 min read

https://sooperkanoon.com/case/15315

For advocates & juniors · 7-day free trial

Brief this judgment before chambers

Stop skimming 50 pages - get an 18-section AI Brief on this case, ask scoped follow-ups, and find related precedents with Semantic Search. Full trial, no card required.

18-section brief - facts, issues, ratio, relief
Ask this case - answers cite the judgment
Semantic search - find precedents by meaning
Research drawer - sections, cites, related cases

Citation: sooperkanoon.com/15315
Court: Customs Excise and Service Tax Appellate Tribunal CESTAT Delhi
Decided On: Mar 04, 1999
Subject: Land Acquisition

Case Summary

AI-generated summary - not the official court judgment text.

Land Acquisition

Key legal issue: Land Acquisition

Parties & Advocates

Appellant / Petitioner

Commissioner of Central Excise

Respondent

Pearl Engg. Works

Legal References

Reported In: (1999)LC854Tri(Delhi)

Excerpt

1.1 the respondents herein were manufacturing rivets during the relevant period i.e. 1-2-1989 to 31-7-1989. they were affixing the brand name of their customers on such rivets manufactured by the respondents and sold to such customers. revenue by issue of a show cause notice dated 31-8-1989 demanded duty on the clearance value of those rivets having the brand name of the customers affixed thereon by invoking para 7 of notification no. 175/86-ce. 1.2 a contention was raised before the lower appellate authority that the appellants, no doubt, were affixing the brand name of their customers on the said rivets but the said rivets were not being sold by their customers. those rivets were used in manufacture of further products, namely, clutch assembly or brake assembly. it was, therefore, contended by the respondents herein that the provisions of para 7 of notification no. 175/86-c.e. would not be applicable to the said goods in view of the proviso to para 7. on this contention lower appellate authority, namely collector (appeals), has given the following findings :- "the main question is whether these goods are going to the market to be sold and bought as they are indicating in the mind of buyer or the consumer a connection between these products on one hand and api and hindustan ferodo on the other. probably they are not. if the quantity sold to api and hindustan ferodo are exclusively used by the latter in the manufacture of their product, then the para 7 of the notification no. 175/86 since para 7 of the notification will be operative in their case. i, therefore, allow the appeal to this extent and set aside the impugned order on these terms. after factual examination on the lines indicated above, if there is prima facie liability, appropriate demand may be issued under section 11 a. the appeal is disposed of accordingly.".it is this order which has been challenged by the revenue for the appeal before us.2. learned jdr, shri s. nunthuk for the revenue submits that it.....

Full Judgment

1.1 The respondents herein were manufacturing rivets during the relevant period i.e. 1-2-1989 to 31-7-1989. They were affixing the brand name of their customers on such rivets manufactured by the respondents and sold to such customers. Revenue by issue of a show cause notice dated 31-8-1989 demanded duty on the clearance value of those rivets having the brand name of the customers affixed thereon by invoking para 7 of Notification No. 175/86-CE. 1.2 A contention was raised before the lower appellate authority that the appellants, no doubt, were affixing the brand name of their customers on the said rivets but the said rivets were not being sold by their customers. Those rivets were used in manufacture of further products, namely, clutch assembly or brake assembly. It was, therefore, contended by the respondents herein that the provisions of para 7 of Notification No. 175/86-C.E. would not be applicable to the said goods in view of the proviso to para 7. On this contention lower appellate authority, namely Collector (Appeals), has given the following findings :- "The main question is whether these goods are going to the market to be sold and bought as they are indicating in the mind of buyer or the consumer a connection between these products on one hand and API and Hindustan Ferodo on the other. Probably they are not. If the quantity sold to API and Hindustan Ferodo are exclusively used by the latter in the manufacture of their product, then the para 7 of the Notification No. 175/86 since para 7 of the Notification will be operative in their case.

I, therefore, allow the appeal to this extent and set aside the impugned order on these terms. After factual examination on the lines indicated above, if there is prima facie liability, appropriate demand may be issued under Section 11 A. The appeal is disposed of accordingly.".

It is this order which has been challenged by the Revenue for the appeal before us.

2. Learned JDR, Shri S. Nunthuk for the Revenue submits that it is not disputed that the brand names of the other customers have been affixed and those customers are not eligible to the benefit of Notification No.175/86-C.E. Contention of the respondents, on the other hand, as set out above, is that the goods manufactured by the respondents are not being further traded; they are being used as original equipment in further manufacture of clutch assembly or brake assembly. The provisions of para 7, therefore, are not applicable in the present situation, as held by the adjudicating authority subject to verification of the fact whether the goods sold by the respondents are used in the manufacture of further products clutch assembly or brake assembly. If it is found that any of the rivets sold to customers had been further sold by them then the duty liability would be devolved on such rivets in view of para 7 of the Notification. Therefore, the demand of duty, if any, needs to be revised on the basis of actual verification so carried out. A further demand is not required to be issued under Section 11 A; only the demand is required to be reduced on verification, as mentioned above. To this extent the impugned order is modified, otherwise we confirm the finding of the same.

3. Before we part with this order, we must also mention the reliance placed by the learned JDR on Apex Court's judgment in the case of U.O.I. v. Paliwal Electricals Put. Ltd. reported in 1996 (83) E.L.T.241 and Tribunal's judgment in the case of C.C.E. v. Wood's Galmour Industries reported in 1991 (54) E.L.T. 153 (Tribunal). We are of the view that the said judgments are not applicable in the present case inasmuch as the proviso of para 7 was not referred to in the said judgments. Further, the judgment of the Apex Court was essentially on the constitutionality of para 7 which was upheld by the Apex Court. It has nothing to do with the problem before us. Consequently, the aforesaid judgment relied upon by the learned JDR of the Revenue have no application in the facts and circumstances of this case.

Same Court & Year Customs Excise and Service Tax Appellate Tribunal CESTAT Delh... Same Parties Commissioner of Central Excise vs Pearl Engg. Works Same Subject Land Acquisition