COMMISSIONER OF CENTRAL EXCISE, PANCHKULA Vs. SPECIAL MACHINE

JUDGEMENT

(1.) This order shall dispose of C.E.A. Nos. 48 and 120 of 2005 as common questions of law and facts are involved. These appeals have been tiled by the revenue under Section 35G of the Central Excise Act, 1944 (for brevity, "the Act') challenging order dated 28-4-2004 [2004 (169) ELT 215 (Tri. - Del.)] and order dated 2-12-2004, passed by the Customs, Excise and Service Tax Appellate Tribunal, New Delhi (for brevity, the Tribunal) in respective cases. The facts are being referred from C.E.A. No. 48 of 2005.

(2.) Brief facts of the case are that M/s. Special Machiners-respondent was having three separate Units in Karnal and engaged in the manufacture of welding electrodes, plants & machinery and flux, falling under Chapters 83, 84, 85, 38 and 29 of the Schedule attached to the Central Excise Tariff Act, 1985 (for brevity, the Tariff Act'). It was also holding L4 Licences for manufacturing of said products. M/s. Industrial Products, M/s. Modern Equipments and M/s. S.M. Welding Electrodes (P) Ltd., all situated at Karnal, are also licensed/registered with the department and engaged in the manufacture of welding electrodes. M/s. Perfect Industries. Karnal. was a declarant.

(3.) On 6-3-1992, the Central Excise Preventive Officers of Delhi visited two premises of the respondent as well as units belonging to M/s. Industrial Products, M/s. Modern Equipments and M/s. S.M. Welding Electrodes (P) Ltd. and M/s. Perfect Industries and some quantity of welding electrodes and pacing material etc. were seized. Later on it was detected that some of the material was unaccounted and did not tally with the records. On 6-3-1992 itself, the statement of Shri Vitap Jain, Chief Executive of the respondent was recorded who admitted that he was also the authorised signatory of M/s. Industrial Products, M/s. S.M. Welding Electrodes (P) Ltd. and M/s. Modern Equipments. The statements of various employees working in the aforementioned industrial units were also recorded under Section 14 of the Act. On 23-3-1992, the statement of Shri R.M. Jain, Proprietor of the respondent as well as Shri Vipin Jain, Accounts Assistant of the respondent was recorded. Summons were issued to Shri R.M. Jain to appear on 22-5-1992, 22-6-1992 and 10-7-1992 but he failed to appear on one pretext or the other. After recording the statements and analyzing the same it was found that Shri R.M. Jain, Proprietor of the respondent was providing readymade coating material to different units, which is an essential ingredient required for the manufacture of welding electrodes, through his other concern, namely, M/s. Perfect Industries. However, no stock register was being maintained but only invoices were raised. It was also found that Modern Equipments and S.M. Welding Electrodes were manufacturing some of the brands owned by the respondent under royalty agreement.