2012 (10) TMI 543 - AT - Central Excise

Manufacture - Extended period of limitation alleged that appellant manufactures spare parts and also procures them from the market and clear them as if they have manufactured the same Held that - Mere fixation of logo on the goods by supplier of raw materials who does not have even the requisite machines to manufacture the goods, cannot make him manufacturer - they do not have the necessary infrastructure to manufacture the bought-out spare parts - question of invocation of extended time-limit for imposition of penalty does not arise

Summary

Issues:
1. Whether the appellant's activities amount to manufacturing spare parts?
2. Whether affixing the logo indicates manufacturing by the appellant?
3. Whether the Commissioner's conclusion on manufacturing is valid?
4. Whether the appellant's actions align with legal precedents on manufacturing spare parts?

Analysis:

1. The issue revolves around whether the appellant's actions of procuring spare parts not manufactured by them and supplying them as genuine spare parts constitute manufacturing. The Revenue contends that the appellant clears bought-out spare parts as if they were manufactured by them, leading to duty demands. The appellant argues that they did not keep separate accounts for bought-out items, and the Commissioner's conclusion lacks substantial evidence beyond the show cause notice.

2. Concerning the logo affixed on the spare parts, the appellant asserts that it only states "TRF genuine spare parts" without indicating manufacturing by TRF. The Commissioner's failure to consider a DGMS letter approving specific manufacturers for certain spare parts, which the appellant could not manufacture, supports the appellant's case and challenges the Commissioner's findings on the logo.

3. The Commissioner concluded that the appellant's activities amount to manufacturing spare parts, triggering duty demands. However, the Tribunal's decision in previous cases such as S & S Industries and Enterprises Ltd. and Crystal Sanitary Fittings Pvt. Ltd. establishes that mere assembly, testing, labeling, or affixing a brand name or logo may not necessarily constitute manufacturing. The appellant's lack of necessary infrastructure for manufacturing bought-out spare parts further weakens the Commissioner's stance.

4. Considering the legal precedents and the specific circumstances of the case, the Tribunal finds that the appellant's actions do not amount to manufacturing spare parts. Therefore, the appeal is allowed on its merits alone, and the question of imposing penalties under extended time-limits does not arise. The Tribunal's decision is based on the lack of substantial evidence supporting the Commissioner's conclusion and the alignment of the case with established legal principles regarding manufacturing spare parts.

In conclusion, the Tribunal rules in favor of the appellant, allowing the appeal and stay petitions based on the lack of evidence supporting the Commissioner's stance that the appellant's activities constitute manufacturing spare parts. The judgment highlights the importance of considering legal precedents and substantial evidence in determining manufacturing activities in such cases.