ORDER
Harish Chander, President
1. M/s. Surya Electronic Construction, Varanasi has filed the above appeal being aggrieved from the Order passed by the Collector of Central Excise, Allahabad. The said appeal was received in the registry on the 23rd Feb., 1993. Simultaneously, a stay application duly supported by an affidavit has also been filed. Shri V. Lakshmi Kumaran, learned Advocate has appeared on behalf of the appellants. He pleaded that the appellant is manufacturer of electric table fans and total production of the fans is sold to Jay Engg. Works and there is an agreement to this effect. He pleaded that the Revenue authorities have adopted the brand name price viz. price at which the goods are sold by Jay Engg. Works. He pleaded that the price by the brand name cannot be adopted. In support of his argument, he cited Supreme Court decision in the case of Sidhosons and Anr. etc. v. Union of India reported in 1986 (26) E.L.T. 881 (SC). He pleaded that the appellants’ purchase laminations and rotters from Jay Engg. Works, Hyderabad and the same are being purchased after determination of their cost price. He pleaded that purchase of raw materials is at arm’s length. He also argued that the value of these goods purchased from brand name owners viz. Jay Engg. Works the price is duly paid by the appellant on each and every invoice for the raw material and it is open to the appellant to purchase from outside market, too. In support of his argument, he cited the decision of the Tribunal in the case of L.V.T. Products, Hubli v. Collector of Central Excise, Belgaum vide Stay Order No. 15/1993-A, dated 6-1-1993. He drew the attention of the Bench to para No. 3 of the Stay application which appears on page No. 2 of the stay application where the appellant has mentioned that the factory is closed since December, 1991, due to financial difficulty and there are no purchase orders from the purchaser viz. Jay Engg. Works. He pleaded that in case the appellants’ are desired to deposit the duty amount of Rs. 95,513/- and penalty of Rs. 25,000/- it would amount to undue hardship. He also argued that in the Show Cause Notice there is no whisper of allegation or imposing of penalty and as such no penalty can be imposed. Mrs. C.G. Lal, learned SDR who has appeared on behalf of the respondent relied upon the Order-in-Original. She pleaded that the rawmaterials were supplied by the purchaser for fans viz. Jay Engineering Works and as such the price at which the goods are being sold by the brand name owner viz. Jay Engg. Works that price should be adopted.
2. We have heard both sides and have gone through the facts and circumstances of the case. During the course of arguments, we were told that the appellant had duly paid the price for raw-materials viz. rotters and laminations purchased for the appellant for Jay Engg. Works. The purchases are on principal to principal basis. He pleaded that by no stretch of imagination the price at which the goods have been sold. He relied on the decision of the Hon’ble Supreme Court in the case of Sidhosons and Anr. v. Union of India reported in 1986 (26) E.L.T. 881 (SC) where the Hon’ble Supreme Court had held as under :-
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3. We are told that the factory is closed since Dec., 1991. During the course of hearing, we enquired from the learned Advocate whether the factory is closed till this date. To the Bench’s query learned Advocate stated that the factory is closed till this date and appellants are not in a position to pay this penalty and duty amount. Accordingly, keeping in view the decision of the Hon’ble Supreme Court in the case of Spencer & Co. Ltd., Madras which was followed by this Tribunal in the case of Sonodyne Television Company v. Collector of Central Excise, Calcutta reported in 1985 (22) ELT 582 (Tribunal), we are of the view that in case the appellants are desired to deposit the duty amount and penalty amount, it would amount to undue hardship. We dispense with the pre-deposit of the same and further order that during the pendency of the appeal, the revenue authorities shall not pursue the recovery proceedings. In the result, the stay application is allowed.