1999 (3) TMI 250 - AT - Central Excise

Tribunal revises duty liability based on actual verification of rivets sold with brand names.

The Tribunal modified the impugned order, directing a revision of duty liability based on actual verification of the rivets sold with customers' brand ... SSI Exemption - Brand name of customer affixed on goods Issues:1. Applicability of para 7 of Notification No. 175/86-C.E. on rivets with customers' brand names.2. Interpretation of whether the rivets were sold or used in further manufacture.3. Revision of duty liability based on actual verification.4. Relevance of previous judgments in similar cases.Analysis:The case involved a dispute regarding the applicability of para 7 of Notification No. 175/86-C.E. on rivets manufactured by the respondents and sold to customers with the customers' brand names affixed. The Revenue demanded duty on these rivets, claiming they fell under the purview of the notification. The lower appellate authority found that if the rivets were exclusively used by the customers in manufacturing their products, para 7 of the notification would not apply. The authority set aside the order, allowing an appeal subject to further verification of the liability under Section 11A. The Revenue challenged this order.The Revenue contended that customers whose brand names were affixed on the rivets were not eligible for the notification benefit. However, the respondents argued that the rivets were not for trading but used in manufacturing clutch or brake assemblies. The Tribunal agreed that if the rivets were further sold by the customers, duty liability would apply under para 7. The Tribunal directed a revision of duty liability based on actual verification, without issuing a new demand under Section 11A.Additionally, the Tribunal dismissed the relevance of previous judgments cited by the Revenue, stating they did not apply to the current case as they did not consider the proviso of para 7. The Tribunal clarified that the Apex Court's judgment on the constitutionality of para 7 did not impact the present matter. Therefore, the cited judgments were deemed inapplicable to the facts of this case.In conclusion, the appeal was disposed of with the Tribunal modifying the impugned order to revise duty liability based on verification while confirming the findings on other aspects. The Tribunal's decision emphasized the need for actual verification to determine the applicability of para 7 and duty liability concerning the rivets in question.