TRENT LTD. Vs. COMMISSIONER OF CENTRAL EXCISE, VAPI

JUDGEMENT

(1.) ALL the appeals are being disposed off by a common order as they arise out of the same impugned order passed by the Commissioner in de novo proceedings. The said order has confirmed a demand of Rs. 73.63 lakhs approx. against M/s. Lakme Ltd. (now known as M/s. Trent Ltd.), along with imposition of penalty of Rs. 50 lakhs. In addition, penalty of Rs. l lakh each stand imposed upon other two appellants, who are the employees of M/s. Lakme Ltd. The matter was earlier remanded by the Tribunal vide its order Nos. 304 -306/99, dt. 17 -3 -99, with direction to the Commissioner to examine the agreement entered into by M/s. Lakme Ltd. with other unit for production of talcum powder and to re -decide the matter in the light of the Tribunals order in case of M/s. Mistair Home Products, wherein identical dispute was involved in respect of M/s. Lakme Ltd. and M/s. Mistair Home Products and Revenues appeal was rejected.

(2.) AFTER hearing both sides and after going through the impugned order, we find that M/s. Lakme Ltd., Mumbai were engaged in the manufacture of talcum powder under the brand name Exotica for the period prior to the period involved in the present appeal. During the period March 1984 to December 1985, the said goods were actually manufactured by one M/s. Urnee Cosmetics (P) Ltd., under an agreement with M/s. Lakme Ltd. The Commissioner in his impugned order, has held that inasmuch as the talcum powder being manufactured by M/s. Urnee Cosmetics was under the direction and control of M/s. Lakme Ltd., it is M/s. Lakme Ltd., who is to be held as manufacturer. On the other hand, it is the appellants contention that admittedly the goods were being manufactured by M/s. Urnee Cosmetics and other two units being M/s. Hemali Cosmetics and M/s. Novelty Impex P. Ltd., the goods were being sold to M/s. Lakme Ltd., it is the M/s. Urnee Cosmetics who is to be held as the manufacturer.

(3.) AFTER going through the impugned order and after appreciating the various evidences on record, we find that one Shri D.J. Rebeiro, who was a General Manager of the factory, left the services around three years back and the brand -name Exotica for the talcum powder was given to Shri D.J. Rebeiro by M/s. Lakme Ltd. against consideration. Shri D.J. Rebeiro, was power of Attorney holder in M/s. Granada Consultants, which was started in around June 1983. The said consultancy firm provided the formula/specification of talcum powder, plant layout, sources of supplies of various inputs and a technician to 3 units by the name of M/s. Urnee Cosmetics, M/s. Hemali Cosmetics and M/s. Novelty Impex P. Ltd. It stand recorded in the impugned order that M/s. Hemali Cosmetics and M/s. Novelty Impex P. Ltd. were found to be dummy units and the production of M/s. Urnee Cosmetics was being shown as having been manufactured by said units. The above finding does not stand disputed by the learned advocate appearing for the appellant, who submits that in that case, the entire clearance shown by M/s. Hemali Cosmetics and M/s. Novelty Impex P. Ltd. could have been clubbed with the clearance of M/s. Urnee Cosmetics and clearances in excess of small scale exemption could have been charged to duty. However, this is not what has been done in the present impugned order.