Job workers liable as manufacturers for duty payment; penalties reduced for early payment. Confiscation upheld.

REGENCY PRINTERS Versus COMMISSIONER OF CE., BANGALORE

REGENCY PRINTERS Versus COMMISSIONER OF CE., BANGALORE - 1997 (92) E.L.T. 654 (Tribunal) Issues:
1. Liability of duty on job workers for manufacturing activities.
2. Appropriation of duty amount paid under protest.
3. Confiscation of goods and imposition of penalty.

Analysis:

Issue 1: Liability of duty on job workers for manufacturing activities
The case involved Vijai Industries obtaining raw materials from ITC Ltd. for processing and supplying slides to various entities. The department alleged duty liability on Vijai Industries for the period 1/88 to 3/90. The appellants had paid the duty under protest before the proceedings started. The department demanded duty from job workers as well. The argument put forth was that job workers are also liable to pay duty as they are considered manufacturers. The Tribunal observed that the manufacturer is responsible for duty payment, and in this case, the job workers were considered manufacturers. The duty demanded from the appellants was already paid under protest, and both parties agreed to appropriate this amount towards the duty due.

Issue 2: Appropriation of duty amount paid under protest
The appellants had already deposited the duty amount under protest pending the outcome of the proceedings. The counsel for the appellants requested the amount to be appropriated towards the duty due against the appellants, as it was paid in the nature of a deposit. The Tribunal agreed that the amount paid under protest could be appropriated towards the duty as demanded in the impugned order. The appellants agreed not to press their refund claim, and the Tribunal held that the amount should be appropriated against the appellants as the due amount.

Issue 3: Confiscation of goods and imposition of penalty
The Tribunal upheld the confiscation of goods for Vijai Industries and Rajhans Enterprises based on the lower authority's order. Regarding penalties, the Tribunal acknowledged the liability of the appellants but considered that since the duty amount was paid before the show cause notice and at the tariff rate, the penalty should be reduced. The Tribunal decided to reduce the penalties imposed on the appellants to Rs. 10,000, Rs. 25,000, and Rs. 2,000 for Vijai Industries Unit I, Regency Printers, and Rajhans Enterprises, respectively. The appeals were disposed of in accordance with the above terms.