Customs, Excise and Gold Tribunal - Delhi
Kartik Telecomptrols (P) Ltd. vs Commissioner Of C. Ex., Delhi-I on 27 February, 2002
Equivalent citations: 2002(81)ECC342, 2002(141)ELT800(TRI-DEL)
ORDER V.K. Agrawal, Member (T)
1. In this appeal, filed by M/s. Kartik Telecomptrols (P) Ltd., the issue involved is whether the Appellants are the manufacturer of D.P. Boxes and accordingly liable to discharge duty liability under the Central Excise Act and Rules.
2. Shri J.S. Agrawal, learned Advocate, submitted that the Appellants, an entrepreneur engineer having no factory, no power connection, no machinery, no labour and staff, received purchase orders from M/s. Telecommunication Consultants India Ltd., and M/s. M.T.N.L. for supply of D.P. Boxes/casing with mounting plates; that they entered into an agreement with M/s. Salwan Plastomers for manufacture of D.P. Boxes out of the raw materials supplied by them; that for the purpose of quality control dies were supplied by the Appellants with a condition to test and inspect the goods in the factory of the job worker who was registered with the Central Excise Department as a licensee for the manufacture of the excisable goods; that on account of dispute with the job worker, complaints were made by Shri Kamal Sharma, proprietor of Salwan Plastomers and the present case is outcome of those complaints; that the Deputy Commissioner demanded excise duty from the Appellants and imposed penalty holding that the room given by the job worker to the Appellant was used for assembling and testing and the Appellants were the manufacturer of D.P. Boxes; that their appeal was also rejected by the Commissioner (Appeals) observing that the job worker had not charged any amount on account of assembly as well as getting the goods inspected by M.T.N.L. and the job worker had only done the moulding of the cover and the base for the D.P. Boxes and that the address of the Appellants was same as that of the job worker which confirmed that the Appellants had taken a room from Salwan Plastomers on rent.
3. The learned Advocate, further, submitted that the Appellants had not manufactured the D.P. Boxes as neither they had any factory nor any labour and machinery; that complete casings were supplied by M/s. Salwan Plastomers; that it is apparent from the Bills given by the job worker that charges were charged for casing assembly also; that the bills mentioned only "job work" as the raw materials were supplied by the Appellants; that the address of the Appellants is different from that of the job worker which is evident from the Bills given by the job worker himself; that Shri Ajay Kumar Agarwal, Director of the Appellants, had deposed in his statement dated 5-9-91 that the complete casings were supplied by M/s. Salwan Plastomers which is mentioned in the show cause notice also. He relied upon the decision in the case of O.R.G. Systems v. CCE, Vadodara, 1998 (102) E.L.T. 3 (S.C.), wherein it was held that the supply of raw materials alone does not make the supplier as manufacturer. Reliance was also placed on the decision in the case of Fort Gloster Industries Ltd. v. CCE, Calcutta-II, 2001 (134) E.L.T. 137 (T) and Bhihwara Spinners Ltd. v. CCE, Jaipur, [2000 (118) E.L.T. 591 (T) = 2000 (37) RLT 734 (CEGAT)] wherein it was held that assembly of duty paid parts of card cans into card cans docs not amount to manufacture. Finally the learned Advocate referred to the decision in the case of CCE, Baroda v. M.M. Khambhatwala, 1996 (84) E.L.T. 161 (S.C.).
4. Countering the arguments, Ms. Krishna Mishra, learned SDR, submitted that the assembly of D.P. Box was done by the Appellants only; that the job worker had only done the moulding of the cover and the base for the D.P. Boxes; that a perusal of the ground plan of the factory reveals that a room had been given by the job worker to the Appellants for carrying out the assembly work. She relied upon the decision in the case of M..J. Exports Pvt. Ltd. v. Collector of Customs, Bombay, 1986 (26) E.L.T. 972 (T) wherein it was held that assembly of fishing rods out of imported components amounts to manufacture. Reliance was also placed on the decisions in the following cases :-
(i) Texmaco Ltd. v. CCE, Calcutta [1999 (105) E.L.T. 146 (T) - 1999 (83) ECR 462 (T)]
(ii) Hansa Electronics (I) Pvt. Ltd. v. CCE, Mumbai-I [1999 (113) E.L.T. 472 (T) - 1999 (35) RLT 23 (CEGAT)]
5. We have considered the submissions of both the sides. The Central Excise duty is leviable on excisable goods which are produced or manufactured. Accordingly duty will be payable by the person who manufactures or produces the goods. It has been held by the Supreme Court in many cases including the case of CCE v. M.M. Khambhatwala [1996 (84) E.L.T. 161 (S.C.)] that the supplier of raw material is not the manufacturer. It has not been disputed by the Revenue that the Appellants gave raw materials to the job worker. The only dispute is about the assembly of D.P. Boxes after moulding of the cover and the base of the D.P. Boxes by the Job-workers. The Revenue has relied heavily on the statement of Shri Kamal Sharma, proprietor of M/s. Salwan Plastomers, Job worker who had deposed that the Appellants were assembling the D.P. Boxes in the room provided by him. Except the statement of Mr. Sharma, there is no other evidence to corroborate the same. On the other hand the Appellants have contended that Ajay Aggarwal, their Director, had deposed in his statement dated 5-9-91 that complete casings were supplied by M/s. Salwan Plastomers and the packing was also undertaken by the Job-workers. In support of this they have produced some of the bills in which mention has been made as "D.P. Box casing assembly work (Job Work only) material supplied by KPPL" and "D.P. Box casing (Job work only) Material supplied by KTPL." In terms of these bills and the fact that Mr. Kamal Sharma was not allowed to be cross-examined, we are of the view that the Revenue has not succeeded in establishing that the assembly of D.P. Boxes was carried out by the Appellants. Accordingly we allow the appeal.