Customs, Excise and Gold Tribunal - Tamil Nadu
Tamil Nadu Electricity Board vs Commissioner Of Central Excise, ... on 28 March, 2001
ORDER
Shri S.L. Peeran (Oral)
1. These two appeals filed by the same appellants i.e. TNEB, are on identical issue. Therefore, they are taken up together for disposal as per law. Appellants had entered into independent contracts with their contractors for manufacture of RCC poles on supply of materials by them. The department issued show cause notices to the appellants demanding duty on the RCC poles manufactured by the appellants. Appellants contested the demand on the ground that they are not the manufacturers of the RCC poles and that the contractors are the manufacturers. They produced entire evidence including the terms of the contract to show that the relationship between them and contractors were on principal to principal basis and the claim for duty had to be initiated only against the contractors and not against them. However, the plea was rejected by the Commissioner by his order in original No. 115/94 dated 12.12./94 and confirmed a duty of Rs 3,43,295/- for the period October 89 to 31.8.93 under the provisions of Section 11A(1) of the CE Act, 1944. By another order in original No. 104/94 dated 11.12.94 the Commissioner confirmed on the same findings duty of Rs 3,21,055/- for the period from Oct 89 to 31.8.93 by invoking the provisions of Section 11A(1) of the CE Act, 1944.
2. Learned Counsel for the appellants submits that the issue is no longer res integra. He pointed out that this Bench took up the issue for consideration in a larger number of appeals and decided the issue in favour of the appellants after examining the terms of the contracts, this Bench by final orders held that it is the contractors who are the manufacturers of the RCC poles and duty demand against the appellants is not sustainable. He cited one of the final order bearing No. 1660 - 1664/98 dated 21.8.98 in their own case which in turn had referred to the earlier order passed by the then President vide final order No. 1289/96 dated 19.8.96. He submits that the President's order has been extensively quoted in the order No. 1660 - 1664/98 dated 21.8.98. He submits that the situation in the present appeals is identical to the appeals decided earlier and therefore rejection of their pleas is not justified. Therefore he prays for allowing the appeal with consequential relief.
3. Shri S.Sudarsan, learned DR submits that there is no dispute that that RCC poles are goods and liable to duty. Appellants were supplying raw materials and the goods were manufactured within the appellants' yard. He submits that the contractors were hired workmen and cannot be treated as independent contractors and the relationship is not that of principal to principal basis as noted by the Commissioner in the impugned orders.
4. On consideration of the submissions made we notice that similar orders passed by the Commissioners earlier has been scrutinized and gone into in great detail by the Tribunal earlier in final order 1289/96 dated 19.8.96 in appellants' own case and on examination, it was noticed that the relationship between the appellants and the contractors were on principal to principal basis. Therefore, the Tribunal rejected the Revenue's contention that the contractors were hired workmen, and on such finding, allowed the TNEB appeals. Similarly, the said order was followed by this Bench vide final order No. 1660 - 1664/98 dated 21.8.98. In the present case also we notice that the appellants have produced contract where the terms and condition for manufacture of RCC poles are same as entered into by them earlier. Hence the findings arrived by the Tribunal in the earlier cases that the contractors are not hired workmen, will apply to the present case also. Therefore, respectfully following the ratio of the Tribunal judgement, the impugned orders are set aside and the appeals allowed with consequential relief if any.
(Dictated and pronounced in open Court)