Customs, Excise and Gold Tribunal - Delhi
Dixon Utilities And Exports Ltd. vs Commissioner Of C. Ex. on 27 July, 2000
Equivalent citations: 2000(121)ELT780(TRI-DEL)
ORDER
K. Sreedharan, J. (President)
1. When stay applications filed by appellants in appeal Nos. E/1266, 1263, 1669 and 1311/2000-A came up for orders, a Bench of this Tribunal stayed the proceedings for recovery of the duties and penalties imposed on the appellants therein. The Bench also ordered those appeals to be posted today, 27-7-2000 in case appeals are filed by M/s. Philips India Ltd. Appeal filed by M/s. Philips India Ltd. is E/2324/2000-A. Along with that appeal, they moved application No. E/1265/2000-A praying for staying the operation of the impugned order wherein duty and penalty have been imposed. In view of the earlier order on the stay applications filed in the connected appeals, we took up appeal E/2324/2000-A also for final disposal along with the earlier appeals.
2. Short facts necessary for the disposal of these appeals are as follows.
3. M/s. Dixon Utilities and Exports Ltd. are engaged in the manufacture of CTVs and other audio products right from its inception in 1993-94. They manufacture various CTVs for Philips India Ltd., Singer, Shivaki and Akai utilising the material supplied by those brand name holders. M/s. Dixon Utilities were paying duty on the goods manufactured by them strictly following the principles laid down by the Supreme Court in the decision in Ujagar Prints and Ors. v. Union of India and Ors., 1989 (39) E.L.T. 493 (S.C). Department took up the view that the assessable value should be the value at which these goods were sold by the brand name holders, namely, M/s. Philips India Ltd., M/s. Singer India Ltd., M/s. Entel Ltd., etc. In this view, show cause notices were issued demanding differential duty. This claim was disputed by the noticees. After elaborate discussion on the matter, the adjudicating authority, namely, the Commissioner passed orders-in-original No. CCE(ADJ)VLS/07/2000 dated 8/10-2-2000, CCE(ADJ)VLS/05/2000 dated 17/19-1-2000, CCE(ADJ)VLS/04/2000 dated 6/10-1-2000 and CCE (ADJ)VLS/07/2000, dated 8/10-2-2000. As per these orders, the duty demanded in the show cause notices was confirmed and penalties were also imposed.
4. The Commissioner (Adjudication) came to the conclusion that the principles laid down by the Supreme Court in Ujagar Prints case are not applicable to the facts on hand, but are covered by the decision in Pawan Biscuit Co. Pvt. Ltd. v. Collector of Central Excise - 1991 (53) E.L.T. 595 (T). Decision of this Tribunal in Pawan Biscuit Company case was challenged before the Supreme Court in Civil Appeal No. 1819/91. By judgment dated 20-7-2000, their Lordships of the Supreme Court reversed the said decision holding that issue therein is covered by the principles laid down in Ujagar Prints case. In that decision, their Lordships came to the conclusion that any profit obtained or expenses incurred by the brand name holder cannot be included in the assessable value of the product.
5. Show cause notices were issued to M/s. Dixon Utilities (noticee No. 1), M/s. Philips India Ltd., M/s. Entel Ltd. and M/s. Singer India Ltd. (noticees No. 2 in the respective notices) and the officers of noticees 1 and 2. As stated earlier, M/s. Dixon Utilities manufacture CTVs and other audio products with the materials supplied by M/s. Philips India Ltd., M/s. Entel Ltd. and M/s. Singer India Ltd. At this juncture, it may be worthwhile to note that M/s. Dixon Utilities also manufacture CTVs etc. in their own brand name "Weston". They also manufacture CTVs and other equipments for Akai, Thomson and Shivaki. In the impugned order, the adjudicating authority found that "Noticee No. 2, namely, Philips India Ltd., Entel and Singer were indisputably the manufacturers of CTVs in question." On going through the records in its entirety, we are at a loss to find as to how the Commissioner came to this conclusion. This conclusion is patently against the evidence in the case. Philips India Ltd., Entel and Singer were not the manufacturers of CTVs in question. They were getting those CTVs and other equipments manufactured by Dixon Utilities, utilizing the raw materials supplied by them. The contract entered into between Philips India Ltd., Entel Ltd. and Singer India Ltd. on the one hand and Dixon Utilities on the other makes the position clear. That contract brings out the terms of job contract entered into between the parties. So, the liability to duty of Dixon Utilities must depend on the principles stated by the Supreme Court in Ujagar Prints case.
6. In reply to the show cause notices, noticees specifically contended before the adjudicating authority that valuation of the CTVs would have to be on the basis of the judgment of the Hon'ble Supreme Court in Ujagar Prints v. Union of India reported in 1989 (38) E.L.T. 535 as clarified in 1989 (39) E.L.T. 493. Nowhere in the impugned order the Commissioner stated that the duty paid by M/s. Dixon Utilities was not in conformity with those principles. In other words, the Commissioner had nowhere found that even on going through those principles, differential duty is recoverable from any of the noticees. In this situation, we are left with no option but to state that duty was, in fact, paid by M/s. Dixon Utilities and Exports Ltd. strictly following the principles stated by the Supreme Court in Ujagar Prints case. Reliance placed by the Commissioner on the decision of the Tribunal in Pawan Biscuit Co. case reported in 1991 (53) E.L.T. 595 cannot be of any assistance to the department in view of its reversal by the Supreme Court in Civil Appeal No. 1819/91.
7. In view of what has been stated above, we find that the impugned orders have only to be set aside. We do so. Appeals are allowed and the orders passed by the Commissioner (Adjudication) are set aside in their entirety.