RAYMOND LIMITED Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) THE appeal is directed against Order -in -Appeal No. GWL/655/2004, dated 30 -9 -2004 passed by the Commissioner of Central Excise (Appeals), Gwalior. The appellant, M/s. Raymond Ltd., are manufactures of excisable goods falling under Chapters 51, 55 and 58 of the First Schedule to the Central Excise Tariff Act, 1985. During the visit of the officers to the appellant -factory, it was discovered that the appellant had got fabricated racks and trolleys falling under Central Excise Heading No. 9403 from fabricators within their own factory premises out of the raw materials supplied by the appellant and based on their own drawings and specifications. It was further found that the appellant had also supplied consumables such as welding rods, cutting gas, etc., required for such fabrication work. These facts were corroborated by the Dy. Manager (Commercial) of the appellant -firm and the representative of the fabricators in their statements recorded under Section 14 of the Central Excise Act, 1944. The appellant, however, did not file any classification or price declaration as envisaged under Rules 173B and 173C of the Central Excise Rules, 1944 nor did they file any statutory returns in respect of the said activity. Therefore, a show cause notice dated 8 -3 -2001 for recovery of duty amounting to Rs. 18,43,877/ - was issued along with interest thereon. The notice was adjudicated upon and the duty demands were confirmed along with interest and also by imposing equivalent amount of penalty under Section 11AC. The appellant preferred an appeal before the lower appellate authority. They submitted that the demand is time -barred inasmuch as the show cause notices were issued after a lapse of more than six months. Secondly, it was argued that since the trolleys and racks were consumed within the factory production, they are eligible for the benefit of duty exemption under Notification No. 67/95 -C.E., dated 16 -3 -1995. These contentions of the appellant were rejected by the lower appellate authority, who dismissed the appeal. Hence, the appellant is before us.

(2.) THE learned counsel for the appellant submits that they had engaged fabricators to undertake fabrication work within their factory. These fabricators are independent entities and the impugned goods have been manufactured by the fabricators and, therefore, the fabricators are the manufacturers of the impugned goods and the appellants are not the manufacturers and, therefore, the duty demands on the appellant is not sustainable in law. The fabricators have undertaken the work by engaging their labour and the appellant had no control over the labour. In view of the above, it is clear that the fabricators are manufacturers on their own account.

(3.) WE have carefully considered the submissions made by both the sides.