2001 (8) TMI 741 - AT - Central Excise

Summary

Issues:
1. Whether the appellant fabricated G.I. Ducts without obtaining Central Excise Registration and removed them without payment of duty.
2. Whether the appellant can be considered the manufacturer of the G.I. Ducts or if the sub-contractor is the actual manufacturer.

Issue 1:
The appeal stemmed from an Order-in-Original confirming a show cause notice alleging that the appellant fabricated G.I. Ducts without Central Excise Registration, removed them without duty payment, and erected them at a project site. The appellant had undertaken the manufacture of 380 sq. meters of G.I. Ducts valued at Rs. 53,200 as part of a contract with M/s. N.F.C.L., Kakinada. The show cause notice focused on the value of 380 sq. meters out of 500 sq. meters of G.I. Ducts manufactured.

Issue 2:
The appellant argued that they were not the manufacturers of the G.I. Ducts but rather a sub-contractor, M/s. Syed Hussain & Sons, was the actual manufacturer. The appellant pointed out a previous case where a similar issue was settled by the Tribunal, confirming that the sub-contractor was the manufacturer based on a principal-to-principal relationship. The Tribunal upheld the Commissioner (Appeals)'s decision, emphasizing that the sub-contractor used their machinery to manufacture the goods, establishing them as the real manufacturers. The appellant contended that the facts in the present case were verifiable and aligned with the previous ruling, indicating that they were not the manufacturers.

The Department argued that the appellant did not explicitly state the sub-contractor's involvement in this case, suggesting a need for further verification. However, upon reviewing the show cause notice, previous orders, and contractual details, the Tribunal found that the sub-contractor was indeed the manufacturer based on the principal-to-principal relationship. As per the previous ruling and the established facts, the Tribunal concluded that the appellant was not the manufacturer, and the proceedings against them were not maintainable. Consequently, the appeal was allowed, and the proceedings against the appellant were set aside based on the sub-contractor being identified as the manufacturer.