9911796707
TMI Blog1985 (10) TMI 172X X X X Extracts X X X X X X X X Extracts X X X X ..... waxed paper. M/s. Industrial Packaging after manufacturing waxed paper to the extent of 46,557 Kgs. returned the said waxed paper to the appellants after charging conversion charges. The appellants did not pay excise duty on the waxed paper so got manufactured from M/s. Industrial Packaging. Show cause notice was, therefore, served upon the appellants asking them as to why penalty under Rule 173Q should not be imposed and excise duty of Rs. 69,494.56 should not be demanded or realised under Rule 9(2) of the Central Excise Rules, 1944 in respect of 65,441.3 Kg. of such waxed paper. 2. In reply to the said show cause notice the appellants stated, inter alia, that they had no facility for manufacture of waxed paper and as such they did not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... penalty was, however, set aside by the Central Board of Excise and Customs, who heard the first appeal. 4. Not satisfied with the order passed by the Board, the appellants filed Revision Application before the Government of India, Ministry of Finance, Department of Revenue, which now stands transferred to this Tribunal to be heard as an appeal. 5. We have heard Shri N. Mukherjee, Advocate, for the appellants and Shri A.S. Sundar Rajan, J.D.R., for the department and gone through the record. 6. Shri Mukherjee, the learned Counsel for the appellants submitted that the appellants cannot be called manufacturers of the waxed paper which, in fact, had been manufactured by M/s. Industrial Packaging in their factory. He cited two decisions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntative countered the arguments advanced by Shri Mukherjee, the learned Counsel for the appellants by submitting that it is not a case where the appellants actually supplied raw materials and got the job work done. Here, the appellants did the printing work themselves in their own factory and then sent base paper for waxing. According to the learned Departmental Representative, waxing is a process of manufacture and the appellants should pay excise duty on the manufactured goods i.e. waxed paper as M/s. Industrial Packaging did the waxing work at the instance of the appellants and returned the goods back to the appellants. In the presence of the decision of the Hon ble Supreme Court in Shree Agency s case (Supra), the decisions of the Hon b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out previously obtaining a licence. Admittedly, the appellants have not obtained nor were they required to obtain any licence for the manufacture of waxed paper by M/s. Industrial Packaging. M/s. Industrial Packaging were already having an excise licence for the manufacture of waxed paper on its own account. This section indicates that it is the licence holder who is the manufacturer and not any other person who brings his raw material for being subjected to manufacturing process in the factory. 9. The provisions of Rules 43 and 44 also indicate the same thing. Rule 43 requires every manufacturer, who intends to manufacture excisable goods for the first time, to give notice in writing to the Collector and further requires every such manu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Assistant Collector, the Collector and the Central Government as the Revisional Authority, holding that the appellants, though they did not own any factory, were manufacturers. The appellants contention that it used to sell yarn to the weavers and buy cloth from them was not accepted. It was found by the authorities that the so-called proprietor-weavers had no interest in the production of cloth and did not even maintain proper accounts of consumption of raw material and production of cloth. Large amounts were also advanced to the weavers. The authorities held that, it passes comprehension why a commercial concern engaged with profit making motive should first advance large sums of money to the individual factory owners, receive thei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tory and charges his supplier for his manufacturing work ? The authorities below have wrongly applied the decision in the case of Shree Agency (Supra) to the facts of the present case. 14. The decision of this Tribunal in the case of M/s. Britannia Biscuit Co. Ltd., Madras (Supra) also does not help the Department in the present circumstances of the case. In that case the manufacturing activity was being done under the control and supervision of the appellants. The appellants had a right to reject the containers not conforming to their standards. The work order did not specify as to what would happen to the rejected material. The work order also did not refer to the scrap which was bound to arise. In those circumstances, the Tribunal fou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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