B.S. RAJASEKAR Vs. COLLECTOR OF CENTRAL EXCISE
CUSTOMS EXCISE AND GOLD(CONTROL) APPELLATE TRIBUNAL
COLLECTOR OF CENTRAL EXCISE
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G.A. Brahma Deva, Member (J) -
(1.) THIS appeal arises out of and is directed against the Order -in -Original No. 43/83 dated 26 -12 -1983 passed by the Collector of Central Excise, Bangalore.
(2.) THE point to be considered in the present case is whether mere supply of raw materials to other units for the manufacture of the goods will make the raw material supplier as manufacturer.
(3.) THE facts of the case, in brief, relating to this issue are that the appellant is a sole proprietor of M/s. Vidyuth Engineering Company and also a partner in M/s. Trishul Enterprises and M/s. Gayathri Equipments, carrying on business of supplying steel furniture to the Health Department of Government of Karnataka. Initially it was charged that all the three concerns have manufactured steel furniture and parts thereof and supplied to the Department and got manufactured through other small scale units, viz., M/s. Manchu Industries, M/s. Kripal Industries, M/s. Balamurugan Steel Furniture Works, and M/s. Karnataka Small Industries out of raw materials supplied by these three concerns. After considering the defence and in view of the finding of the High Court of Karnataka that these three concerns are independent legal entities. It was accepted by the Department that they are separate and independent legal entities so far it relates to supply of goods to the Department of Government of Karnataka. But on point of manufacture of the goods it was observed that there is no evidence to show that M/s. Trishul Enterprises and M/s. Gayathri Equipments had got manufactured steel furniture on their behalf, but there is sufficient evidence to show that M/s. Vidyuth Engineering Company (appellant) only had supplied raw materials to four units and got steel furniture manufactured on their behalf. The Collector who adjudicated the proceedings held that the appellant is the manufacturer of Steel furniture and parts of steel furniture without a Central Excise licence and removed the said goods without issue of gate passes and also without payment of central excise duty. Accordingly, he ordered for confiscation of the seized goods subject to redemption fine of Rs. 3,00,000/ - under Rule 173Q(1) of the Central Excise Rules, 1944. He also imposed personal penalty of Rs. 1,00,000/ -. The other units were also imposed penalty of Rs. 1,000/ - each, for having manufactured the steel furniture in their premises without central excise licence and evaded duty on behalf of the appellant.
Shri B.B. Gujral, learned Advocate, for the appellant, submitted that since there is a charge against the appellant and other units for having manufactured the same commodity, the order is not sustainable as both the parties cannot be considered to be the manufacturers of the very commodity. He said that the four units are small scale Industries which are situated in distinct places owned by different persons having their own establishments. Since they are independent contractors and mere supply of raw materials by the appellant and got it manufactured on payment of job charges will not make supplier of raw material as manufacturer as it was held by the Tribunal in similar cases. He said that the view of the Tribunal in the case of Kerala State Electricity Board v. Collector of Central Excise 1990 (47) E.L.T. 62 was affirmed by the Supreme Court as reported in Court Room Highlights in Page A -161 of the very issue. He referred to the decision in the case of Union of India and Ors. v. Cibatul Ltd.,
1985 (22) E.L.T. 302 where Supreme Court expressed the similar view and said that latest decision on this point is that of Karnataka High Court in the case of Applied Industrial Products Private Ltd. and Anr. v. Collector of Central Excise, Bangalore
1991 (32) ECC 104 within whose jurisdiction the appellant unit is situated. He also cited following decisions in support of his contention : -
(1) Super Printers v. Collector of Central Excise, Hyderabad - 1987 (30) E.L.T. 745 (Tribunal). (2) Bhagwan Das Kanodia and Ors., Bombay v. Collector of Central Excise, Bombay -1987 (32) E.L.T. 204.
(3) Metal Box India Limited, Calcutta v. Collector of Central Excise, Calcutta -1986 (23) E.L.T. 187.
(4) Collector of Central Excise, Madras v. Modoplast (P) Ltd., Coimbatore - 1985 (21) E.L.T. 187 (Tribunal). ;
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