2000 (8) TMI 636 - AT - Central Excise

Summary

Issues:
Identification of the manufacturer of steel drums - whether the appellant or the independent contractor.

Analysis:
The main issue in the present appeal was to determine whether the appellant should be considered the manufacturer of the steel drums or if the independent contractor with whom the appellant had a contract should be deemed the manufacturer. The appellant argued that the contractor, as per the terms of the contract, was responsible for making the drums as per specifications, subject to final inspection by the appellant's chief engineer, with raw materials supplied by the appellant. The appellant contended that merely supplying raw materials and providing space to the contractor did not make them the manufacturer. Reference was made to a previous Tribunal decision in a similar case.

Upon examining the contract between the appellant and the contractor, it was found that the contractor was responsible for fabricating the steel drums according to specified processes mentioned in the contract. The drums' specifications were outlined, and prices were mentioned as net for supply at the appellant's works. The chief engineer of the appellant inspected the drums before delivery, and any defects were to be rectified by the contractor at no additional cost. Payment was contingent on verifying the weights of each drum. The bills raised by the contractor indicated them as a general order supplier for fabrication and erection of steel jobs.

The Commissioner's order noted that the appellant provided space within their factory, raw materials, and other infrastructural facilities to the contractor. However, the order lacked elaboration on the additional infrastructural facilities provided by the appellant. The Tribunal agreed with the appellant's argument that merely providing space, raw materials, and inspecting the final product did not make the contractor a dummy of the appellant, leading to the conclusion that the appellant was the manufacturer. Citing a previous Tribunal decision and Supreme Court judgments, the Tribunal ruled that the contractor, who actually manufactured the goods, should not have duty fastened on them due to the appellant providing land, raw materials, and accommodation to the contract laborer.

Based on the similar facts and circumstances in the present case, the Tribunal concluded that the appellant could not be considered the manufacturer of the steel drums. Consequently, the appeal was allowed, and the impugned order-in-original was set aside, providing consequential relief to the appellants.