2007 (8) TMI 540

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....June, 2002. The demand is in adjudication of a show-cause notice dated 14-12-2004. An earlier payment of Rs. 11 lakhs made by the said company has been appropriated towards the demand. The Commissioner's order also imposes a penalty of over Rs. 2.7 crores on M/s. MSML and separate penalties on S/Shri P. Balakrishnan, Managing Director of M/s. C.P. Spinning Mills Pvt. Ltd. and on the buyers of the subject goods. After examining the records and hearing both sides, we note that M/s. MSML are challenging the above demand by pleading that they did not manufacture the goods. They say that the goods were manufactured by M/s. C.P. Spinning Mills Pvt. Ltd. (CPSML, for short) in terms of a Memorandum of Understanding dated 8-7-2000 signed by the two ....

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....n the latter. On the other hand, learned SDR submits that any transfer of the unit by M/s. MSML to M/s. CPSML was not communicated to the department till a copy of the MoU was supplied to the investigating officers on 23-4-2003. It is also submitted that M/s. CPSML had never applied for transfer of registration to their name on the strength of the MoU, nor had they followed the Central Excise procedure relating to manufacture of excisable goods at any stage during the period of dispute or even thereafter. According to learned SDR, M/s. MSML have not made out a case free from doubt against the demand raised on them. 2. After giving careful consideration to the submissions, we think that certain pertinent questions remain to be satisf....

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....ertained to clearances of goods manufactured by M/s. CPSML. No copy of any return has been produced before us to substantiate this claim, nor can this argument be accepted in the normal course. A return filed by a manufacturer registered with the department is, in normal course, presumed to be one filed in respect of excisable goods manufactured by himself. There is no quarrel with the observations recorded by learned Commissioner in paragraphs 32.07 and 32.08 of his order, which are to the effect that 'manufacturer' is a person who actually manufactures excisable goods and it is his liability to pay duty thereon. All throughout, M/s. MSML had been representing themselves to be the manufacturers of the goods by (a) retaining Central Excise ....