1. The prayer in the Application is for dispensing with the condition of predeposit of duty amount of Rs.2,47,339.00 and an equivalent amount of personal penalty.
2. After hearing both sides duly represented by Shri S.K.Roychowdhury, learned Advocate and Shri V.K.Chaturvedi, learned S.D.R. for the Revenue, we find that the appellants were engaged in the manufacture of auto parts and were supplying the same to M/s. TELCO. In respect of the parts supplied to M/s. Auto Spare Parts Division, they were placed Order by M/s. TELCO for supply of branded goods, where 'T' was to be affixed as their buyer's brand name. These goods were cleared by the appellants on payment of duty, after filing the Classification List to that effect. However, in respect of the other goods, which were being supplied by the appellants to Auto Material Division of M/s. TELCO Ltd., as no brand name was being affixed, the same were cleared on payment of duty under Notification Nos.175/86 and 1/93. The Department, however, entertained a view that the un-branded goods also must have been manufactured by the appellants with a brand name inasmuch as the same were manufactured on the same machine, mould, dies, equipment etc.
which were having an in-built system of affixing the brand name. As such, the Commissioner in his impugned Order has concluded that it is impossible that some of the goods were manufactured with the brand name and some without brand name.
3. This has been explained by the appellants by submitting that mould, dice which were carrying the brand name, 'T' were different than the mould and dice which were being used for the manufacture of unbranded goods. As such, no presumption can be arrived at that the appellants were equipped only for manufacture of branded items. Shri Roychowdhury has clarified that there were different types of moulds, dies, equipments etc. being used by them for the manufacture of branded as well as unbranded goods. This fact, according to the learned Advocate, is verifiable and in fact, before passing the Order, the Commissioner should have verified the same instead of passing the impugned Order on the basis of assumption.
4. Alternative plea has been taken that even if it is considered that they have cleared the goods as branded goods, the same have been used by their purchaser as original equipment parts, in which case the benefit of the Notifications was available subject to observance of Chapter x Procedure. This position is admitted by the adjudicating authority, but the benefit has been denied because Chapter x Procedure was not followed. He also submits that it is a well-settled law that substantive benefit flowing from the Notifications should not be denied on the ground of non-observance of procedural formalities. As such, he submits that the confirmation of demand of duty against the appellants and imposition of penalty by denying the benefit of small-scale Notifications in question, are neither justified nor warranted.
5. We have also heard Shri V.K.Chaturvedi, learned S.D.R. for the Revenue. He submits that the fact that whether all the moulds, dies and equipments being used by the appellants were carrying the in-built system of affixing the brand name or not, is a fact which requires verification at the original level and nothing can be said at the appellate stage.
6. As regards the alternative contention of the appellants, he submits that since the Procedure of Chapter x has not been followed, the benefit of the Notifications in question should not be allowed to the appellants.
7. We have given our careful consideration to the contentions raised from both sides. We agree with the submission of the learned Advocate that there is no tangible evidence on record to substantiate the charge of the Department that the appellants had been indulging in the manufacture of branded goods with the brand name of M/s. TELCO. The appellants, during the relevant period, had been filing RT-12 returns along with the gate passes showing clearance of unbranded goods. There is no evidence on record to show that what was cleared as unbranded goods was, in fact, branded goods. We also find that the impugned Order of the Commissioner is based upon the fact that it is it is not possible for the appellants to manufacture branded as well as unbranded items with the same moulds, dies and equipments having the in-built system of affixing the brand name. However, the above finding of the Commissioner has been challenged by the appellants as factually incorrect. An offer has been made by them to get the appellants' manufacturing system examined by the Revenue so as to arrive at the truth of the above finding of the Commissioner. For this purpose, we set aside the impugned Order and remand the matter to the Commissioner for de-novo adjudication in the light of the observations made by us above. He would also examine the appellants' alternative claim that the items in question were used by M/s. TELCO as original equipment parts.
If that be so, we hold that non-observance of Chapter x Procedure should not come in the way of the appellants for availing the benefit of the Notifications in question.
8. No opinion is being expressed on the point of limitation and the Commissioner is directed to look into the same afresh at the time of de-novo adjudication. Appeal is thus allowed in above terms. Stay Petition also gets disposed of.