2004 (1) TMI 234 - AT - Central Excise

Summary

Issues:
Classification of goods under different headings than proposed in show cause notice; Determination of manufacturer for Central Excise duty liability.

Analysis:
1. Classification of Goods:
The case involved an appeal by the Revenue against an Order-in-Appeal where the Commissioner (Appeals) held that the Adjudicating Authority cannot classify goods under a different heading than proposed in the show cause notice. The Revenue contended that while show cause notices indicated various headings of Chapter 94 for furniture classification, the Joint Commissioner classified the product under a different heading, which the Revenue argued was appropriate. Reference was made to previous cases to support the argument that classification changes can be made even if not explicitly mentioned in the show cause notice. However, the Tribunal emphasized the importance of aligning classification decisions with the notice to ensure fairness and adherence to procedural requirements.

2. Determination of Manufacturer:
The central issue revolved around determining whether the respondents, who supplied raw materials, design, and specifications for furniture manufacturing, were the manufacturers liable for Central Excise duty. The Revenue argued that since all manufacturing activities occurred under the respondents' control, they should be considered the manufacturers. In contrast, the respondents contended that the actual job workers who fabricated the furniture should be deemed the manufacturers. Citing legal precedents, it was established that the person who actually manufactures the goods is considered the manufacturer for excise duty purposes. The Tribunal referred to a Supreme Court case involving biscuit manufacturing to illustrate that supplying raw materials and instructions does not automatically confer manufacturer status. Ultimately, it was ruled that the respondents were not the manufacturers of the goods in question, absolving them of Central Excise duty liability.

In conclusion, the judgment clarified the principles governing the classification of goods based on show cause notices and the determination of manufacturers for Central Excise duty liability. It underscored the importance of aligning classification decisions with notices and established that the actual fabricators of goods are considered the manufacturers for excise duty purposes, even if raw materials and instructions are supplied by others.