Custom, Excise & Service Tax Tribunal
Commissioner Of Central Excise vs M/S. Maheshwari Technocast Ltd on 24 February, 2014
IN THE CUSTOMS, EXCISE AND SERVICE TAX
APPELLATE TRIBUNAL, NEW DELHI
PRINCIPAL BENCH, COURT NO. III
Date of Hearing /Decision: 24.2.2014
Excise Appeal No. 3225, 3226 and 3227 of 2006-Ex(SM)
[Arising out of Order-In-Appeal No. 72-74/RPR-II/ 2006 dated 30.6.2006 passed by Commissioner of Customs & Central Excise (Appeals II ), Raipur (CG) ]
For approval and signature:
Honble Ms. Archana Wadhwa, Member (Judicial)
1
Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
No
2
Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
No
3
Whether Their Lordships wish to see the fair copy of the Order?
Seen
4
Whether Order is to be circulated to the Departmental authorities?
Yes
Commissioner of Central Excise. Appellants
Raipur (CG)
Vs.
M/s. Maheshwari Technocast Ltd. Respondent,
Shri Harish Mantri Shri Suresh Mantri Appearance:
Shri B B Sharma, AR for the Appellants
Shri A K Mishra, Advocate for the Respondents
ORDER NO . FO/ 50870-50872 /2014-SM(Br)
Per Ms. Archana Wadhwa:
All three appeals filed by the Revenue are being disposed of by a common order as they arise out of same impugned order passed by Commissioner (Appeals).
2. As per facts on record, the respondents are engaged in the manufacture of various types of casting / fabricated items and machine parts. The dispute in the present appeal relates to the issue as to when the respondents are supplying the raw material to the job worker who are actually manufacturing the goods, whether the duty liability can be fastened upon the respondents or not.
3. Commissioner (Appeals) in his impugned order has taken into consideration the entire facts and circumstances and has examined the fact that the assessee supplied the raw material to various work contractors who were carrying out the manufacturing activity. As per the statement of various contractors, they had undertaken the job work and has manufactured the final product out of various raw materials supplied by the assessee and they were being paid Rs.2,000/- PMT for the job work done by them. There was a proper contract entered into between the assessee and the job worker and all payments have been made either by cheque or by cash and entries have been made in their ledger account. These job workers are carrying out the job work of casting in terms of drawings supplied by the assessee and thereafter the castings are removed under challans.
From the above evidence, Commissioner (Appeals) has held that duty has to be affirmed against job workers who have carried out the work independently and are not in the control or supervision of the assessee. Accordingly, he has held that it is the job worker who are manufacturers of the goods and no duty liability can be fastened on the raw material supplier i.e. assessee.
4. Revenue being aggrieved with the said order has filed the present appeal.
5. After hearing both sides, I find that the law is settled. Supplier of the raw material cannot be held as the manufacturer, when the goods are being independently manufactured by the job worker. Reference can be made to Honble Supreme Court order in the case of O R G Systems vs. CCE, Vadodara [1993 (102) ELT 3 (SC)]. To the similar effect is the Tribunals decision in the case of Elecon Engineering Company Ltd. vs. CCE Aurangabad [2006 (200) ELT 125 (Tri-Del)]. Similarly, the Honble Supreme Court rejected the Revenues appeal against the order of Tribunal reported as Collector of Sonali Enterprises [1998 (97) ELT A 66 (SC)]. It was held that in the said decision that raw material supplier cannot be treated to be a manufacturer unless it is shown that job workers were merely dummy unit or a puppet under the control and supervision of raw material supplier. To the similar effect is the decision of the Tribunal in the case of General Industrial Corporation vs. Collector [1997 (94) ELT A 146 (SC)] and the Tribunals decision in the case of M/s. Hindustan Zinc Ltd. vs. CCE, Visakhapatnam [2005 (188) ELT 331 (Tri-Chennai)].
6. As such, I find that there are umpteen number of decisions holding that raw material supplier cannot be treated as manufacturer and it is the job worker who is manufacturing the goods independently in his factory which has to be held to be a manufacturer. The appellant authority has examined the entire circumstances including the fact of different job workers manufacturing the goods in their own factories out of raw material supplied by the respondents and as per their drawings. This fact by itself will not make the respondent as a manufacturer of the goods. Commissioner (Appeals) has rightly held in favour of the respondents and no infirmity can be found in his order. Accordingly, all four appeals filed by the Revenue are rejected.
(Pronounced in the open court )
( Archana Wadhwa ) Member(Judicial)
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