1998 (7) TMI 95 - HC - Central Excise

Summary

Issues:
1. Whether TELCO is required to obtain Central Excise Registration for manufacturing wooden furniture in their office.
2. Whether TELCO can be considered as manufacturers of furniture under the Central Excise Act, 1944.
3. Whether the communications from the Asstt. Commissioner of Central Excise directing TELCO to obtain Excise Registration and pay Excise Duty on wooden furniture are legal and within jurisdiction.

Analysis:
1. The Writ Petition was filed by Tata Engineering & Locomotive Co. Ltd. (TELCO) and Mr. H. Rohinesh against the letters and directions issued by the Asstt. Commissioner of Central Excise, Div. 'H' Worli, Bombay, regarding the requirement for TELCO to take Central Excise Registration for wooden furniture manufactured in their office. TELCO engaged architects, independent contractors, and laborers for furniture manufacturing, and argued that they do not have control over the contractors or the manufacturing process. The court admitted the petition and stayed the communication from the Excise Department, pending final hearing.

2. TELCO contended that they should not be considered as manufacturers of furniture under Section 2(f) of the Central Excise Act, 1944. They highlighted that they engaged contractors and job workers for carpentry work, and merely providing premises for manufacturing does not make them the manufacturers of furniture. The court, comprising of the Hon'ble Mr. Chief Justice M.B. Shah and Hon'ble Mr. Justice Khandeparkar, admitted the petition, issued a Rule, and stayed the communication from the Asstt. Commissioner directing TELCO to obtain Excise Registration and pay Excise Duty on wooden furniture.

3. The communications from the Asstt. Commissioner of Central Excise alleged that TELCO was engaged in manufacturing wooden furniture and directed them to follow Central Excise procedures, obtain Excise Registration, and pay the appropriate Excise Duty. TELCO challenged these communications as illegal, without jurisdiction, and not in accordance with the law. The court found merit in TELCO's arguments and stayed the communications, emphasizing that TELCO's activities did not fall under the definition of manufacturing furniture as per the Central Excise Act, 1944. The Hon'ble Judges granted relief to TELCO by admitting the Writ Petition and staying the directions issued by the Excise Authorities.