TaxTMI 
TaxTMI 
1997 (12) TMI 279
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.... first appellants, entered into an agreement with M/s. Konark Television Ltd. for assembling populated circuit boards (PCBs) out of the parts/components supplied by M/s. Konark Television Ltd. They supplied these assembled PCBs to Konark Television Ltd. without payment of duty in what they claimed was bona fide belief on their part that since certain essential parts like transistors had to be fitted into PCBs at the premises of Konark, the goods in the form they were removed from their premises did not attract excise duty. Collector of Central Excise on initiation of proceedings against OWVS, the first appellants and M/s. Konark Television Ltd., the second appellants, held that OWVS were actual manufacturers who were liable to pay duty. He ....
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....the case of Thermax Private Ltd. v. Collector of Customs as reported in 1992 (61) E.L.T. 352. It is his contention that the Tribunal itself in a series of orders has held that procedural infraction cannot have the effect of denying substantive benefit under law, and cites the case of CCE v. IOL as reported in 1993 (66) E.L.T. 215, Hydrabad Allwyn Industries v. CCE as reported in 1990 (45) E.L.T. 584, TISCO v. CCE as reported in 1994 (70) E.L.T. 478 and CC v. J. Fibre Corpn. as reported in 1993 (67) E.L.T. 320. 3. Arguing on behalf of the Konark Television Ltd. the Learned Advocate, Shri S.K. Mohanty submits that demand itself is time barred and they are not liable to any penalty even apart from the merits of the case. He draws out a....
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....on. 4. We have heard both sides. 5. Collector of Central Excise at internal page 6 of the order has recorded that "it is not disputed that the P.C. Boards manufactured/supplied by M/s. O.W.V.S. to M/s. K.T.V. were used solely with Television receivers manufactured by M/s. K.T.V. falling under CHS 8528.00 of the Central Excise Tariff Act, 1985 as parts of the said apparatus. Therefore, its classification or dutiability under CHS 8529.00 of the Central Excise Tariff Act, 1985 is undoubted and if at all some parts are left to be used by M/s. K.T.V. in their factory premises it will not affect the position with regard to levy of duty on the said product ......" From this, therefore, it is clear that it is an admitted position th....
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.... mis-conception that perhaps they were not required to do so since the raw materials for the manufacture of PCBs were supplied by them. On going through the various case laws cited at the Bar, we are satisfied that merely not following Chapter X procedure in its entirety cannot have the effect of denying substantive benefit to which the appellants otherwise are entitled to under law. Once it is admitted that the impugned goods were, in fact, used in the manufacture of television sets of required size there is substantial compliance with requirements of Notification. Collector of Central Excise has denied the benefit on the ground that the procedure as laid down in Chapter X has not been followed. As indicated earlier once the fact of exempt....
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....anted wherever the intended use of material can be established by the importer or by other evidence. Where it was denied was a case where the assessee produced no material to show that the "beneficiary" factory was eligible for the concession under Rule 192. We also note the arguments of the Learned DR that no complete disclosure was made by Konark indicating the fact of manufacture or receipt of PBCs by Konark. We have however referred to the correspondence with Konark which clearly indicates that they were receiving PCBs from OWVS. 7. In short, we are of the view that since the department knew about the receipt of goods, penal liability against them is not sustainable. Similarly, they cannot also be made to pay duty once it is hel....