KANOHAR ELECTRICALS LTD. Vs. COMMISSIONER OF C. EX.

JUDGEMENT

(1.) These two appeals have been filed by M/s. Kanohar Electricals Ltd. and Shri Adesh Singhal, Director, against the common Order -in -Appeal Nos. 211 -213/CE/MRT -I/2004, dated 29 -3 -2004.

(2.) Shri Praveen Sharma learned Advocate, mentioned that the Appellant company manufacture electrical transformers and avail of credit of duty paid on inputs; that they also undertake repair work of old and used duty paid damaged transformers received from various sources; that they had imported TOBS which was sent to M/s. Apar Ltd. directly from place of import for processing on job work after furnishing an undertaking under Notification No. 214/86 -C.E., dated 25 -3 -1986; that some of the quantity of the transformer oil processed out of TOBS and received back by the Appellants was used in the repair of old and damaged transformer for which separate account was maintained; that no MODVAT credit was also availed of by them in respect of such quantity of Transformer Oil; that the Revenue has confirmed the demand of duty on transformer oil used for repairing the duty paid transformers, adopted the sale price of transformer oil by the Appellants to various Electricity Boards and imposed equivalent amount of penalty on the Appellant -company and a penalty of Rs, 25,000/ - on the Appellant No. 2, being Director of the Appellant -company.

(3.) The learned Advocate submitted that the real manufacturer of transformer oil is M/s. Apar Ltd. and the law is settled that the Central Excise duty on the goods manufactured on job work basis can be recovered from the job worker and not from the person who supplied the raw material. He relied upon the decision in the case of CCE and C, Surat v. Span Heat Transfer Equipment Mfrs. Pvt. Ltd., [2001 (135) E.L.T. 861 (T) = 2001 (46) RLT 845 (CEGAT)] wherein it has been held that the job worker who has manufactured the goods will pay duty upon the goods manufactured by it. He, further, submitted that as M/s. Apar Ltd. are manufacturer and the place of manufacture is Bombay, the officer having jurisdiction over the place of manufacture at Bombay has the jurisdiction to demand duty; that, therefore, the Additional Commissioner, Central Excise, Meerut does not have the jurisdiction to demand the duty; that thus the show cause notice and Order -in -Original are without jurisdiction. He also contended that the Revenue has wrongly adopted the sale price of the transformer oil by the Appellants as the assessable value; that the Appellants are only traders and as such the assessable value for the purpose of levying duty shall be value at the hands of the jobs worker in view of the judgment of the Supreme Court in the case of Ujagar Prints v. U.O.I., 1988 (38) E.L.T. 535 (S.C.). Finally the learned Advocate submitted that the demand is time -barred as the show cause notice was issued on 26 -6 -2002 for demanding Central Excise duty for the period from December, 1997 to March, 2000 since the Revenue was aware of the practice of using transformer oil for the repair of the old and used transformers; that in February 2000, an amount of Rs. 58,147/ - was debited on the advice of the Range Superintendent in the Modvat Credit Account in respect of the process loss of TOBS corresponding to the transformer oil used in repair. He gave a copy of their letter dated 22 -3 -2000 in which the payment particulars were intimated to the Range Superintendent. He also mentioned that no penalty is imposable on both the Appellants.