FENNER (INDIA) LTD Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) THESE appeals arise from Order -in -Original No. 11/98 -Adj and 12/98 -CX dated 30.9.98 passed by Commissioner of Central Excise, Hyderabad adjudicating two show cause notices dated 27.3.89 and 19.6.89 confirming the duty demands of Rs. 18,61,815.06 towards Central Excise duty payable for the period from 4/87 to 1/89 under Rule 9(2) of the CE Rules read with proviso to Section 11A(i) of CE Act, 1944. There is a penalty of Rs. 5 lakhs for this period. A further demand of Rs. 4,58,232 towards CE Duty payable for the period 2/89 to 5/89 under Rules 9(2) of CE Rules read with Section 11A of the CE Act and a penalty of Rs. 50,000 under various rules for the same period.

(2.) THIS is the second round of appeal. The same show cause notice had been adjudicated by the Commissioner which had come up before the Tribunal. The Tribunal by their final order No. 352 and 353/93 dated 19.3.93 remanded the matter for de novo consideration after concluding: - (a) affixing of brand name by itself does not amount to manufacture (b) if the test carried out on impugned product is a requirement to test its suitability, then the process of testing is a process of manufacture; (c) if the phosphating/painting is a requirement for the due completion of a final product, then such process of phosphating/painting should be deemed to be a process of manufacture, (d) that there has not been a detailed finding on these issues and the applicability of Note 6 of Section XVI and (e) No detailed finding on time bar also.

(3.) ON de novo adjudication, the Commissioner has besides holding that the demands are not barred by time has also taken a view that the process of phosphating/painting carried out by them would amount to a process of manufacture for the period till 1.4.88 as the same was carried out on the items received from the job workers by the appellants. He has also held that the testing of the items carried out by the appellants in their premises after the items were received from the job worker was also a process of manufacture and therefore all the items were required to have been cleared on payment of duty and that the appellants are liable to pay duty not paid on the goods cleared by them after test and affixing of brand name in packed condition from their premises.