Customs, Excise and Gold Tribunal - Tamil Nadu
Super Sales Corporation vs Commissioner Of C. Ex. on 21 July, 1997
Equivalent citations: 1999(113)ELT914(TRI-CHENNAI)
ORDER T.P. Nambiar, Member (J)
1. The appeal is directed against the orders passed by the Collector. In terms of that order, 5 nos. of MS castings, 5 nos. of battery racks and other goods seized on 27-12-1991 were confiscated on the ground that they were not entered in the RG1 register in spite of the fact that they were fully manufactured. A demand of duty of Rs. 11,77,308.36 is demanded and a penalty of Rs. 1,00,000/- is also imposed against the appellant.
2. The learned Advocate Shri N. Subramanian contended before us that the goods are not fully manufactured. In this connection, he drew our attention to para 28 of the impugned order and stated that the inspection report of the customers goes to show that these are not fully finished product. He also pointed out that these products have not been fully manufactured by the appellants and it has not reached the stage wherein it is to be recorded in RG 1. It was therefore pointed out that these goods are not liable for confiscation.
3. As far as the demand of duty is concerned, Shri Subramanian pointed out that the appellant has contended before the adjudicating authority that the processes carried out by them did not amount to manufacture. He also drew our attention to para 24 of the impugned order wherein the adjudicating authority has reproduced the arguments of the appellant to the effect that the process of bending, shearing, cutting etc. does not amount to manufacture.
4. In this connection, he drew our attention to para 25 of the impugned order wherein the adjudicating authority after quoting several decisions merely stated that considering the activity carried on the raw material and in the light of the decisions referred to, the activity of the appellant amounts to manufacture.
5. Shri Subramanian pointed out that there is no discussion in the impugned order as to what is the activity carried on by the appellant and in the absence of any such discussion, he pointed out that the findings of the adjudicating authority that there Was manufacturing activity involved is without any basis.
6. He, therefore, pointed out that the demand of duty is not proper. He also pointed out that this is a case wherein any penalty is to be imposed on the appellant.
7. The learned JDR, Shri S. Murugandi stated that these goods which were seized were unfinished goods. He pointed out that there is no plea from the appellant as to what is further work which is required to be done on those products to make it a finished goods. In this connection, he also drew our attention to the statement of Shri V. Rajashekar, Accounts Clerk of M/s. Super Sales Corporation wherein he has stated that the goods are finished goods. He pointed out that the adjudicating authority has relied on the statement in para 29 of the impugned order and, in such circumstances, he pointed out that in the absence of any plea by the appellant as to what are the other processes which are to be carried on those seized goods to make it as finished goods, the plea of the appellant has no force.
8. As far as the second aspect of demand of duty is concerned, the learned JDR Shri S. Murugandi could not point out anything in the impugned order to the effect that the adjudicating authority has addressed himself with respect to the activities carried on by the appellant on those raw materials. He stated that there is no discussion with respect to the actual activities which are carried on by the appellants which amounts to manufacture.
9. Further the JDR stated that the adjudicating authority has stated that considering the activity carried on the raw material satisfied that the process carried out by the appellants amounts to manufacture. With respect to penalty, he stated that the penalty is rightly imposed.
10. We have considered the submissions of both the sides. First of all, we will take up the question of confiscation of the seized goods which were seized on 27-12-1991. In this aspect, we find that there is a vague plea advanced by the appellant that these goods are not fully manufactured. It was the plea of the appellant that these goods are semi-finished in character. But there is absolutely nothing in the statement or any other reply of the appellant to show as to what are the other activities which are required to be done on those goods to make them finished goods.
11. On the contrary, there is only a vague statement in this regard. In these circumstances the plea made by the Advocate is not inconsonance with the statement of Shri V. Rajashekar, Accounts Clerk of the appellant who in his statement dated 29-4-1992 had submitted that these are finished goods. In the face of this admission and in the absence of any such explanation furnished even before us, we are of the view that the confiscation of the goods is in accordance with the law. However, in the facts of the case, we reduce the redemption fine of Rs. 25,000/- to sum of Rs. 15,000/-. But for this reduction the confiscation is otherwise upheld.
12. As far as the point No. 2 is concerned it is seen that the learned adjudicating authority has relied on several decisions of the Supreme Court and has held that as per the judicial pronouncements, there must be a transformation of a product from the raw material leading to the emergence of a new and different article having a distinct name, character or use. These principles laid down by the Supreme Court are well established. But what is required to be done by the adjudicating authority is to apply these principles to the facts of this case and then he must come to a conclusion whether the activities carried on by the appellant amounts to manufacture or not. In order to enter such a finding he must discuss as to what are the processes that the appellant had carried out on the inputs received and he must also point out the nature of the product which emerges out after treating those inputs. He should also ascertain as to how it is known in the trade and in the light of those discussions, he must come to a conclusion whether the articles manufactured has a distinct name, character or use. Such discussions are not made in the impugned order and without making such discussions, the impugned order is not legal and proper.
13. Therefore, we set aside the impugned order in this regard and remand the matter to the adjudicating authority to de novo adjudicate the same in the light of our above observations. The penalty to be imposed on the appellant will depend upon his findings in this regard in the de novo proceedings apart from the factor of non-recording of the finished goods in the RG 1 register.
14. The learned Advocate pleaded that limitation is involved in this case and no discussion is made in the impugned order in this regard. Since this is a legal plea, we direct the adjudicating authority to deal with this plea of the appellant also in the de novo adjudicating proceedings.
15. The appeal is disposed of in the above terms.