2008 (7) TMI 375 - HC - Central Excise

Refund - Export of Goods - Who can claim refund - locus standi - The appellant after procuring the required raw material, got manufactured the products from M/s. Lamina Suspension Products Limited on job work basis. In other words lamina Suspension has paid conversion charges for their activities. Both the appellant and the M/s. Lamina Suspension Limited are housed in one premise and both the units are under the control of the appellant/assessee. The appellant before manufacturing the products has paid the duty payable under the Central Excise Act and after getting the products manufactured exported the same - after export he filed the refund claim - CESTAT rejected the refund claim - Held that - Appellant is entitled to get refund - order of commissioner (appeals) granting refund restored - order of CESTAT reversed.

Summary

Issues:
- Interpretation of the term 'manufacturer' under Central Excise Rules for refund claim.
- Whether products manufactured by a sister concern can be considered as manufactured by the appellant.
- Application of the definition of 'manufacture' under Section 2(f) of the Central Excise Act, 1944.

Analysis:
The case involved a dispute regarding the entitlement of the appellant to claim a refund under Rule 57(F) (4) and Rule 57(F)(13) of the Central Excise Rules. The appellant, engaged in exporting spring and spring leaves, got the products manufactured by a sister concern on job work basis. The Department rejected the refund application for the duty paid, leading to a series of appeals and the framing of a question of law for consideration by the High Court.

The main contention revolved around the definition of 'manufacturer' under the Central Excise Act. The appellant argued that since the sister concern was under its control and supervision, the products could be considered as manufactured by the appellant itself. Reference was made to the definition of 'manufacture' under Section 2(f) of the Act, emphasizing that any person engaging in production or manufacture on their own account could be considered a manufacturer.

The High Court analyzed the facts, noting that the sister concern was essentially an extension of the appellant's manufacturing process, operating under its control. Rulings from the Delhi High Court and the Supreme Court were cited to support the interpretation that control and supervision over the manufacturing process were key factors in determining the entity entitled to claim as a manufacturer.

Contrary to the revenue's argument that only the actual manufacturer could claim the exemption, the High Court held that in this case, the sister concern's manufacturing activities were effectively carried out on behalf of the appellant. The Court distinguished previous judgments cited by the revenue, emphasizing the unique circumstances of the present case where control and supervision were established.

Ultimately, the High Court ruled in favor of the appellant, overturning the orders of the original authority and the Tribunal. The Court confirmed the appellant's entitlement to the refund of duty paid, based on the interpretation of the term 'manufacturer' under the Central Excise Act and the specific circumstances of the case.