2005 (9) TMI 410 - AT - Central Excise

Manufacturer - Furniture - Chair, discussion table etc. - Confiscation and penalty - Imposition of

Summary

Issues:
1. Whether the architect can be considered as a manufacturer under Section 2(f) of the Central Excise Act.
2. Whether the duty is payable by the architect for the furniture made.
3. Whether the confiscated goods should be redeemed by the architect.

Analysis:
1. The case involved determining whether the architect, named Kapadia, could be classified as a manufacturer under Section 2(f) of the Central Excise Act. The Commissioner held Kapadia responsible for manufacturing furniture without Central Excise registration and evading duty. However, the Tribunal disagreed, stating that Kapadia provided services as an architect, not as a manufacturer. The Tribunal emphasized that Kapadia did not provide all the factors of production for the furniture; instead, he planned and executed the work for a fee, akin to a service provider. The relationship between Kapadia and the company was not that of a principal and a job worker. The Tribunal concluded that Kapadia could not be labeled as a manufacturer in this scenario.

2. The issue of duty payment by Kapadia for the furniture made was also addressed. Kapadia argued that he was not required to obtain Central Excise registration and that the Department incorrectly calculated the value of the furniture, leading to excessive duty demands. The Tribunal found that duty was indeed payable on the furniture but ruled in favor of Kapadia, stating that he was not the manufacturer. The Tribunal highlighted that the goods belonged to the company, M & M, and not to Kapadia. Therefore, the demand for duty on Kapadia was deemed incorrect. The Tribunal decided that the proceedings, including the demand for duty, had to be quashed as they were based on incorrect premises.

3. Regarding the redemption of the confiscated goods, the Commissioner had given Kapadia the option to redeem the goods, considering him as the manufacturer. However, since the Tribunal determined that Kapadia was not the manufacturer, they concluded that the order of confiscation and the demand for duty were erroneous. Therefore, the Tribunal set aside the Commissioner's order, ruling in favor of Kapadia. The Tribunal held that the confiscated goods essentially belonged to M & M, and Kapadia was not the rightful owner. As a result, the Tribunal quashed the entire proceedings related to the confiscation and duty demand.

In conclusion, the Tribunal found in favor of the architect, Kapadia, stating that he was not to be considered a manufacturer under the Central Excise Act. The Tribunal ruled that the duty demand on Kapadia was incorrect, as the goods belonged to M & M. Therefore, the order of the Commissioner was set aside, and the proceedings related to the confiscation and duty demand were quashed.