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TMI Blog1986 (1) TMI 251X X X X Extracts X X X X X X X X Extracts X X X X ..... .30 lakhs as set out in the Notification. On 16-7-1977 the Range Superintendent wrote to the appellants to produce all their accounts to determine the eligibility for the exemption. The appellants furnished the declaration of stocks as on 17-6-1977. The value of the stainless steel sheets (pattas) got re-rolled were not included to compute the total turnover. So the appellants wrote to the department on 2-9-1977 that their earlier request for alloting a PLA Number may be cancelled. The Superintendent was satisfied that the appellants were eligible for exemption under the Notification. The appellants continued to avail the exemption during 1977-1978 and 1978-1979 as the value of the clearances did not exceed Rs.30 lakhs. 3. On 6-7-1978, the Divisional Excise officers visited the appellants factory and took up investigation whether exemption under the aforesaid Notification was correctly availed. The appellants produced a Certificate from the Chartered Accountant indicating the value of clearances. On 23-4-1980, the appellants were directed to show cause for alleged contravention of Central Excise Rules on the ground that they were wrongly availing the exemption under the Notific ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... job workers had actually carried out the manufacturing process for producing Pataas, etc. and there was no connection or relation between the appellants and the job workers. They were dealings on principal to principal basis. There was no finding that the job workers were the agents of the appellants. In support of this proposition, he placed reliance on 1986 (23) E.L.T. 187 (Tribunal) = 1985(6) E.T.R 770 (Metal Box India Limited, Calcutta v. Collector of Central Excise, Calcutta) where the Tribunal has held that under section 2(1) (iv) only he who was actually carrying on the manufacturing activity was the manufacturer but if a person acted through an agent and the latter carried on the manufacturing activity, it was the principal who should be held as the manufacturer. In that case the appellants had supplied raw materials and the actual manufacturing process was done by another firm who charged conversion charges. The learned counsel stated that the mere fact that the appellants supplied the raw materials to the job workers would make them manufacturers. Separate gate passes have been issued and excise duty has been paid by the job workers qua their manufacturers. He stated tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the value of clearances of the appellants? 7. Regarding the issue of sales tax, we find that a sum of Rs.78,353.02 in respect of stainless steel utensils and a notional sum of Rs. 53,909.88 in respect of S.S. utensils (Job work by appellants) have been included to determine the eligibility or otherwise of the exemption under the Notification. In the Bata Shoe Company (P) Limited case the Supreme Court has categorically laid down that value should be calculated according to the provisions of Section of Central Excises and Salt Act, 1944. Under Section 4(d) (ii) value , in relation to any excisable goods, does not include the amount of sales-tax, if any, payable" on such goods. Hence it follows that the sales tax actually paid in respect of S.S. Utensils and the notional addition of sales tax in respect of the job works done by the appellants cannot be included to determine the total value of the clearance. We must also point out that the appellants have filed additional documents which indicate that they did not collect sales tax in regard to the job work done by them, The Miscellaneous application for receipt of Additional documents is allowed and they support the case of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he manufacturers. There is no finding that the third party factories are dummy institutions created with a view to evade excise duty. Except for the supply of the raw materials (flats) and making payments for the job work done, the actual manufacturing activity was carried on by the third parties. There is no control, connection or relation between the appellants and the third parties. Shri Taraporvala rightly urged that the goods sent to the job worker were sent back to the appellant under proper gate passes and on payment of central excise duty by the job worker. Under those circumstances we cannot describe, the job worker as an agent or the clearances made by him as being on behalf of the appellants . The mere return of the goods by the job workers to the person who had sent the raw materials after completing the job work cannot be called as manufacturer on behalf of the appellants. We also notice that the appellants have sent a letter as early as 2-8-1977 wherein they have stated that the process of rolling was done through other processors and not at their premises. They have emphasised that while taking delivery of such processed materials, they were paying excise duty to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xcise duty on such packing material. The decision reported in 1984 (18) E.L.T 657 (supra) has no application to the present facts, for there is an observation that the interpretation for the concept of job charges and job worker was available under T.I. 68 and not for any other Tariff Item. The item concerned therein was brass circle which did not fall under T.I. 68. The decision in the Oriental Talc Products Pvt. Limited, Udaipur also has no application to the present facts, because the appellants therein were two units - one at Banswara and another at Udaipur and the question arise whether the total clearance of both the units was more than Rs.30 lakhs. As the total turnover of both the units was more than Rs.30 lakhs the exemption was denied. 9. We also notice that there is a decision in appeal No. ED(SB) 134/ 84-B, dated 21-5-1985 (M/s. Super Traders, Bombay v. Collector of Central Excise, Bombay, 1986 (24) E.L.T 338) where the Tribunal considered the application of Notification No-176/77-CE. From the facts of that case we find that manufacture of the stainless steel strips was done on behalf of the appellants. In paragraph 14 of that judgment the admitted fact shows that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his notification exempts goods cleared for home consumption on or after the first day of April in any financial year, by or on behalf of the manufacturer from one or more factories. It is necessary that the clearance should be by or on behalf of a manufacturer. In respect of the goods made for Mahavir Metal Industries by the job workers, Mahavir Metal Industries cannot be said to be the manufacturer. A manufacturer is relevant only in respect of goods manufactured by him; in respect of goods manufactured by others he is not a manufacturer - he may be a customer or a dealer but he will not be a manufacturer. He could even be a totally disinterested person in respect of those goods; but a manufacturer he will not be. To speak of the manufacturer when the goods are made by somebody signifies nothing and conveys an idea that can be translated into any meaningful prediction or intelligible purpose. Furthermore, the notification exempts not goods as such but goods cleared by or on behalf of a manufacturer. A function is served to read this as referring to the goods manufactured by the manufacturer and cleared either by him or on his behalf, but none to understand it as referring to goo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r they do, they do the manufacture and clearances for themselves and they are totally and irrevocably answerable under the Central Excise law for all that they manufacture under the L4 Licences. They cannot, for example, plead that they manufactured and cleared on behalf of Mahavir Metal Industries and, even if they really did so, they would still be answerable for any offences that may be committed by them in respect of the goods, under the Central Excise law. 15. There is no evidence of any kind anywhere to show that the job workers cleared the goods on behalf of anybody else and I, for one am not clear how they could have cleared goods or behalf of Mahavir Metal Industries. They did not do so, Mahavir Metal Industries did not say so and it is only now that the Central Excise says that they cleared the goods on behalf of another (What it?) means I am not able to understand. A clearance is a clearance and stands on its own two feet - it is a legal clearance or an illegal clearance. There is no such thing under the law as clearance on behalf of another, when this latter did not manufacture-on the other hand, a man who manufactured cannot clear the goods on behalf of another. What ..... X X X X Extracts X X X X X X X X Extracts X X X X
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