COMMISSIONER OF C. EX., AHMEDABAD Vs. PREM CONDUCTOR

JUDGEMENT

(1.) BEING aggrieved with the order passed by the Commissioner (Appeals), the Revenue has filed the present appeal. We have heard Shri D.S. Negi, learned SDR appearing for the Revenue and Shri P.M. Dave, learned Advocate appearing for the respondent.

(2.) AS per the facts on record, M/s. Abhay Conductors was placed the purchase order by Gujarat Electricity Board for supply of Aluminium conductors. For the period prior to June 98, the said respondent was manufacturing the conductors himself and was supplying the same to the Gujarat Electricity Board. However, during the period June 98 to Nov. 98, the appellants manufacturing operations were closed down. Accordingly, he sent the raw material to M/s. Prem Conductors for manufacture of aluminium conductors by following the due procedure under Rule 57F. It is not disputed that requisite permission in terms of the said rule from the jurisdictional Asstt. Commissioner was obtained and the due procedure for sending the goods under the cover of invoice and receipt of the final product under the second part of the same invoice was duly followed. On receipt of the goods by M/s. Abhay Conductors, same were being entered into RG -1 Register and cleared to Gujarat Electricity Board. Inasmuch as the M/s. Abhay Conductors was availing the benefit of small scale exemption notification, no duty was being paid by them on the said goods.

(3.) SUBSEQUENTLY , the respondents were issued a show cause notice on 28 -5 -99, alleging that M/s. Abhay Conductors cannot be considered to be a manufacturer inasmuch as they were only testing the goods. The conductors were, in fact, manufactured by M/s. Prem Conductors and have to be treated as their clearances. Accordingly, by treating such clearances as part of clearances of M/s. Prem Conductors, they were found to cross the small scale exemption limit. The duty was, accordingly, confirmed against them along with imposition of penalty on both the respondents, by the original adjudicating authority. However, on appeal, Commissioner (Appeals) accepted the respondents stand that the goods were manufactured by M/s. Prem Conductors under the job work scheme and in terms of Rule 57F(2), for which a letter of permission issued by the jurisdictional Asstt. Commissioner was also produced. Further, relying upon the contract entered by Gujarat Electricity Board with M/s. Abhay Conductors, he held that the same were required to be inspected by the Gujarat Electricity Board officers before clearance and tested. As such, he concluded that testing and inspection by the customers and packaging were important pre -requisite for the subject goods and both the events have been conducted in the premises of M/s. Abhay Conductors, as such it shows that the M/s. Abhay Conductors were the manufacturer.