2006 (2) TMI 366 - AT - Central Excise

Summary

Issues:
Identification of the manufacturer for claiming SSI exemption under Notification No. 8/99 - Whether the loan licensees or the factory owners are entitled to the benefit.

Analysis:
The Appellate Tribunal, Mumbai, addressed the issue of determining the manufacturer eligible for the Small Scale Industries (SSI) exemption under Notification No. 8/99. The case involved a dispute between the Revenue and M/s. G&Y Soaps Works regarding the manufacturing of Carmino Branded Soaps. The Commissioner of Central Excise (Appeals) had ruled in favor of M/s. Turab HV Herbals (P) Ltd., the loan licensees, as the manufacturers of the soaps. The Revenue challenged this decision, arguing that the factory owners, G&Y Soaps Works, should be considered the manufacturers. The Tribunal noted that the loan licensees used their own raw materials, affixed their brand name, and supervised the manufacturing process at the factory owned by G&Y Soaps Works.

The Tribunal referred to the decision of the Hon'ble Gujarat High Court in Indica Laboratories Pvt. Ltd. v. UOI and previous Tribunal orders to establish that a loan licensee can be recognized as a manufacturer in their own right. The key point emphasized was that if the loan licensees oversee the production process at an SSI factory owned by someone else, they are entitled to the SSI exemption benefits. The Tribunal highlighted that even though the cited cases were related to Pharmaceuticals, the underlying principle applied universally to loan licensees operating under their supervision and control in another entity's factory.

After considering the precedents and legal principles, the Tribunal found no fault with the Commissioner (Appeals)'s decision. Consequently, the Tribunal upheld the Commissioner's order, affirming M/s. Turab HV Herbals (P) Ltd. as the manufacturers eligible for the SSI exemption and dismissing the Revenue's appeal.