2014 (2) TMI 9 - AT - Central Excise

Cancellation of Central excise registration - Appellant was not having any factory inasmuch as the premises were approximately 200 sq. Ft. and there was no machinery installed in the said premises - Held that - The registration of manufacturer has to be done in terms of the provision of Rule 9 of Central Excise Rule, 2002 whereas the Notification in question deals with the goods manufactured by a job worker. Even in terms of the said Notification, the raw material and semi finished goods have to be cleared to the job worker, after giving an undertaking to the jurisdictional Assistant Commissioner of Central Excise or Deputy Commissioner that the intermediate goods being manufactured by the job worker shall be duly received in the factory of the principal and would be used in or in relation to the manufacture of the final product in his factory. In the present case, no manufacturing activity is being carried out in the premises owned by the appellant and the goods are being manufactured in fully manufactured condition in the job worker s factory. Merely because the goods are being manufactured by the job worker at the instance of the appellant, will not automatically confer the status of manufacturer on the appellant and he cannot be registered as a manufacturer - appellant cannot be held to be a manufacturer, in the absence of a factory and machines and as such is not entitled to get himself registered. The registration granted stands correctly cancelled - Decided against assessee.

Summary

Issues:
- Registration of manufacturer without a factory or machinery
- Interpretation of Central Excise Act definitions
- Applicability of Notification No. 214/86-CE
- Comparison with previous tribunal decision

Analysis:
1. The case involved the appellant applying for registration as a manufacturer under Rule 9 of Central Excise Rules, 2002, declaring the manufacture of specific goods. However, investigations revealed that the appellant did not have a factory or machinery, instead outsourcing manufacturing to a job worker. The Revenue sought to cancel the registration, citing the definition of 'factory' under the Central Excise Act, 1944.

2. The Revenue contended that the registration was granted for manufacturing the final product, which necessitated a physical factory as per the Act's definition. Consequently, a show cause notice was issued for registration cancellation, leading to the appellant's appeal after the registration was revoked by the authorities.

3. The appellant argued that despite lacking a manufacturing unit, they could register as a manufacturer and have goods produced by a job worker under Notification No. 214/86-CE. They claimed entitlement to registration based on paying excise duty on the final product manufactured by the job worker.

4. The presiding judge rejected the appellant's argument, emphasizing that the Act's definitions of 'factory' and 'manufacturer' required a physical manufacturing location with machinery. Since the appellant's premises did not meet these criteria, they could not be considered a manufacturer eligible for registration.

5. The appellant's reliance on Notification No. 214/86-CE was dismissed as irrelevant, as the registration process under Rule 9 of Central Excise Rule, 2002 was distinct from the provisions of the notification regarding job workers. The judge highlighted the need for a manufacturing activity in the registered premises, which was absent in this case.

6. Furthermore, the judge cautioned against granting manufacturer status without a physical manufacturing setup, as it could lead to misuse and confusion in the registration process. Allowing registration solely based on goods produced by a job worker would undermine the Act's intent and create potential regulatory challenges.

7. The appellant's reference to a previous tribunal decision was deemed inconsequential to the current case, as it pertained to a different issue regarding cenvat credit. Ultimately, the judge upheld the authorities' decision to cancel the appellant's registration, concluding that without a factory and machinery, the appellant could not be recognized as a manufacturer.

8. The judgment, pronounced on 09.01.2014, affirmed the cancellation of the appellant's registration, emphasizing the necessity of a physical manufacturing setup to qualify as a manufacturer eligible for registration under the Central Excise Act.