TaxTMI 
TaxTMI 
2016 (3) TMI 474
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....n made Foreign Liquor. These final products do not attract central excise duty but during the period 1995-96, it was noticed by the Department on the basis of some investigations that the appellant has manufactured certain excisable goods viz. M.S. Receivers, Storage Tanks, Fermentation Tanks, Condensers, Grain Griding Mills, M.S. Coolers, etc. and removed the same without payment of duty. It was also observed that the appellant had not followed the procedure prescribed as per Central Excise Rules. It was also found that the appellant set up various dummy and benami firms by showing the supply of the goods from these dummy units obtained lease/hire-purchase finance on such goods from various finance companies. The amount of lease/hire-purch....
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....ellants. Such scheme was adopted as the appellant could not have raised such lease finance independently and were facing acute financial crisis. Money so obtained has been duly accounted for in the books of accounts of the appellant. As per the scheme, the invoices were raised on the appellant by these three firms for various lease/hire-purchase companies. It is his contention that these invoices were raised only for the purpose of raising working capital and not for any transaction of sale of the goods to the appellant. It is also his contention that the goods shown in the invoices were merely paper transaction and the same were accounted for in the books of accounts. Therefore, the Department has raised the demand on assessment that the a....
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..../-, he submits that in the show cause notice, it is an admitted that the M/s. Basna Engineering Works and M/s. K.L. Engineering Works fabricated fermentation tanks in the factory of the appellant. In that case, contractors are the manufacturers of the goods, therefore, the duty cannot be demanded from the appellant. To support to his contention, he relied upon on the decision of the Tribunal in the case of AFL Pvt. Ltd. v. CCE, Mumbai-II reported in 2013 (295) E.L.T. 211 (Tribunal-Mumbai). Therefore, he prayed that the impugned order is to be set aside. Consequently, the penalties are also not sustainable. 3. On the other hand, ld. DR submits that the allegation against the appellant is that they have manufactured and removed the ex....
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....st issue, we find that it is alleged against the appellant that they have got financed by the dummy and benami Units created by them and they have procured raw materials for manufacturing of capital goods and they have manufactured as the said capital goods were not found at the time of visit in their factory. Therefore, it is alleged that the appellant have removed the said capital goods clandestinely. In fact, it is admitted fact by the Revenue that the appellant has procured capital goods on hire-purchase/lease basis from these dummy units when it is on record that the appellant has entered into transactions with dummy units, therefore, invoices raised by these dummy units cannot be the basis for procuring capital assets in their factory....
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....ant cannot be the manufacturer of the said goods. In that case, the duty is to be demanded from the contractor and not from the appellants. Same view has been taken by the Tribunal in the case of AFL Pvt. Ltd. v. CCE, Mumbai-II (supra), wherein this Tribunal in Para 14 of the order has held as under : - 14. On the contrary in the case of Diamond Cements Ltd. v. CCE, Bhopal - 2012 (283) E.L.T. 226 (Tri.-Del.) the Tribunal held that merely because the appellants were supplying the raw material and was exercising supervisory quality control over the goods, it cannot be held that the contractors were actually hired labourers especially when the contractors have admitted having fabricated the goods for and on behalf of the appellan....