1996 (11) TMI 130 - AT - Central Excise

Summary

Issues: Determination of manufacturer status based on processes carried out on imported cylinders for fire extinguishers.

In this case, the Revenue appealed against the Collector (Appeals) order that the appellants were not manufacturers of fire extinguishers due to lacking equipment for manufacturing or assembling. The Revenue argued that the respondents imported cylinders, sent them for various processes, including filling gas and fitting hoses, and thus should be considered manufacturers. However, the respondents contended that duty is payable when goods are actually manufactured, and as they did not have the machinery for manufacturing, the duty should be discharged by the actual manufacturer. The Tribunal noted the Revenue's admission that the processes carried out on the cylinders amounted to manufacturing under the Central Excises & Salt Act, resulting in a distinct product known as a fire extinguisher. The Tribunal highlighted that the Revenue contradicted itself by claiming the respondents were manufacturers while acknowledging they used a secondary manufacturer for the process. The Tribunal emphasized the principle that the job worker who carries out the manufacturing process is the manufacturer, not the supplier of raw materials. Citing legal precedents, the Tribunal clarified that the character of the product changes when gas is filled in the cylinder, and as the respondents did not perform this process, they could not be considered manufacturers. The Tribunal rejected the Revenue's appeal, emphasizing the lack of evidence to prove the relationship between the raw material supplier and the actual manufacturer was not on a Principal to Principal basis. The Tribunal cited various legal cases to support its decision, highlighting that the actual manufacturer, not the raw material supplier, should be considered the manufacturer in such situations.

In conclusion, the Tribunal held that the respondents could not be considered manufacturers of fire extinguishers based on the processes carried out on imported cylinders. The Tribunal emphasized the legal principle that the job worker who actually carries out the manufacturing process is the manufacturer, not the supplier of raw materials. The Tribunal rejected the Revenue's appeal, highlighting the lack of evidence to support the claim that the respondents should be considered manufacturers. The decision was based on legal precedents and the understanding that the character of the product changes during the manufacturing process, which was not performed by the respondents in this case.