ORDER
Jyoti Balasundaram, Member (J)
1. At the outset, the learned SDR raised a preliminary objection with regard to the jurisdiction of this Bench to hear this appeal on the ground that as the central issue relates to valuation, the jurisdiction vests exclusively with ‘A’ Bench. The learned Counsel, however, submits that the issues are 3 fold, (i) who is to be treated as the manufacturer, (ii) valuation under Section 4 of the Central Excises and Salt Act and (iii) interpretation of Notification 71/78 and 80/80. The learned Counsel contends that the real issue to be determined is the eligibility or otherwise of the appellants to the benefit of the exemption under the above-mentioned notifications and the denial of exemptions are patent from the impugned order and, therefore, this Bench would have jurisdiction to hear the case.
2. The issue in the appeal has been crystallised at page 10 of the impugned order. The appellants manufacture empty fittings besides buying outright from the open market, accessories like chokes and starters. The allegation of the Department is that M/s. K.K. Industries and M/s. Everlite Industries manufactured chokes falling under TI 61-CET during the period 1980-81 and 1981-82 and using the trade mark of Everlite which actually belonged to the appellants herein and also sold the chokes so manufactured mainly to the appellants though they did not have any written agreement for such sale arrangement, since the said chokes had been manufactured by the two Units with the trade mark of the appellants and as a major part of the sale had been effected by the former to the latter, the Department has treated the appellants as the manufacturer engaged in the production/manufacture of chokes within the meaning of Section 2(f) of the CESA and adopted the price at which the appellant sold chokes in the open market as the normal price within the meaning of Section 4 for computing the value of clearances of the chokes manufactured in the premises of KK Industries and Everlite Industries.
3. Para 22 of the impugned order sets out that the dispute is around the aspect whether the appellant is to be considered the manufacturer of chokes within the meaning of Section 2(f). The adjudicating authority has found that the activity of the appellant clearly suggests that the chokes were got manufactured by them from the two other companies and disposed of at a much higher value involving central excise duty and that the appellant was engaged in the manufacture and disposal of excisable goods within the meaning of inclusive definition of Section 2(f).
4. The learned DR at this stage points out that the question as to who is the manufacturer within the meaning of Section 2(f) is a matter falling within the jurisdiction of all Benches and in support of his proposition he cites the order of the Tribunal in the case of Collector of Central Excise v. Ganesh Tobacco reported in 1989 (43) E.L.T. 382 when Bench-A decided this aspect. According to the learned SDR the distinguishing feature of this case-is the case of valuation viz. according to him no determination of rate of duty arises as there is no dispute regarding rate of duty.
5. On a careful consideration of the submissions of both sides, we are inclined to hold that there is great force in the arguments of the learned DR. We have to first see whether it is the appellant who is the manufacturer of chokes or whether M/s. KK Industries and M/s. Everlite Industries are the manufacturers. If the appellant is found to be the manufacturer, then we have next to decide the price to be adopted for the chokes manufactured by M/s. KK Industries and Everlite Industries whether to adopt the price at which KK Industries and Everlite Industries sold to the appellants or the price at which the appellants sold the chokes in the open market. Once this is determined the question of dispute regarding rate of duty does not arise.
Explanation 1 to Notification 71/78 states that “for the purposes of this Notification the expression “value” means the value as determined in accordance with the provisions of Section 4 of the CESA, 1944″. The expression “value”, for the purposes of Notification 80/80 means either the value as determined in accordance with the provisions of Section 4 of CESA or as the case may be according to the tariff value fixed or altered under Section 3 of the said Act (Explanation 3 to Notification 80/80).
6. The Department’s case is that the aggregate value of chokes cleared by the appellants exceeds the ceiling prescribed in the notifications and, therefore, the slab rate specified in the notifications is not available to the appellants. Therefore, the issue is whether the slab rate is applicable to the goods which are the subject matter of the appeal and not whether a particular rate is applicable. The question of “manufacturer” falls within the jurisdiction of every Bench of the Tribunal and has been dealt with by each Bench. Therefore, this issue would not make any difference to the jurisdiction of the Bench. The determinative factor, therefore, is valuation within the meaning of Section 4 of CESA and as has been rightly pointed out by the learned DR, this falls squarely within the jurisdiction of Special Bench ‘A’.
7. We observe that Clause 3 of CEGAT Order 19 (Tech)/86, dated 15-9-1986 reads as follows :-
The Special Bench referred to as Special Bench ‘A’ in Col. 2 of the said table (table appended to the order) shall deal with matters relating, among other things to the determination of any question having a relation to the value of the goods for purposes of assessment of duty of customs or of excise (hereinafter referred to as valuation;) other than the matter specified in paragraph 4.
8. Clause 4(i) states that the other Special Benches referred to as Special Bench Bl, B2, C and D deal with matters relating among other things, to the determination of any question having a relation to the rate of duty of customs or of excise (hereinafter referred to as Classification) in respect of the classes of the goods mentioned in Col. 3 of the said table against the respective Special Benches. Reading of the clauses would clearly show that the jurisdiction would vest with, Special Benches B or C or D as the case may be if there is a dispute regarding rate of duty. However, a dispute regarding rate of duty may arise due to (i) a question regarding appropriate tariff heading or sub-heading or (ii) a question regarding interpretation or application of an exemption notification. But a matter lies in the jurisdiction of Special Benches B, C or D if the dispute arises in relation to either of the two counts or in relation to classification and valuation both in view of the above clauses read with the language of Section 35D of the CESA, 1944.
9. In this case as we have already pointed out there does not appear to be any such dispute and, therefore, the dispute being solely that of valuation is covered by Clause 3.
10. In the light of the above discussion we hold that the jurisdiction to hear this appeal vests with Special Bench-A and we accordingly transfer the matter to that Bench.