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TMI Blog1987 (7) TMI 262X X X X Extracts X X X X X X X X Extracts X X X X ..... red in 1980-81 amounted to Rs. 3,21,605.00. Besides, they were getting Agarbatti, amlapodi and dhup etc. falling under T.I. 68 manufactured on their behalf without the aid of power in the premises, other than their factory premises, and the total of such goods manufactured from outside during the year 1980-81 was to the extent of Rs. 26,25,754.00. In the classification list No. 1/81, dated 22-6-1981 effective from 13-4-1981 filed under T.I. 14F the appellants claimed exemption for the first clearance of Rs. 7.5 lakhs under Notification No. 80/80-C.E., dated 19-6-1980 for the year 1981-82. As value of total clearance of goods falling under Item 14F and those manufactured from outside the factory on their behalf without the aid of power during 1980-81 exceeded Rs. 20 lakhs, the Superintendent of Central Excise issued a show cause notice on 29-5-1981 asking them to explain why the exemption claimed by them under Notification No. 80/80-C.E. in respect of T.I. 14F goods should not be disallowed. The Assistant Collector of Central Excise, Ahmedabad Div. V, vide his order No. MP/5/82, dated 5-3-1982, withdrew the above show cause notice on the ground that the clearance of all excisable go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id not have any supervision over the outside manufacturers. The insense packets were sold from the premises of the cottage manufacturers. Those did not come to the factory premises of the appellants. Some of the goods reached the godown or shop of the appellants, but the same did not reach their factory. Sale proceeds went to the appellants. Notification 80/80-C.E., dated 19-6-1980 centres round clearances from the factory of the manufacturer. Appellants were not the manufacturers of those goods. Even if it is held that the appellants were the manufacturers, then those premises where those insense sticks etc. manufactured were not factories under Section 2(m) of the Factories Act, 1948. Collector held them to be factories under Section 2(e) of the Central Excises and Salt Act. From 1-3-1975 to 1-3-1979 there was an explanation below T.I. 68 that duty was chargeable if the goods were manufactured in a factory within the meaning of Section 2(m) of the Factories Act, 1948. In support of his contention, the learned advocate relied upon the following decisions :- (i) 1985 (21) E.L.T. 299 (Tribunal) (ii) 1984 (3) E.L.T. 746 (Tribunal) (iii) 1985 (21) E.L.T. 187 (Tribunal) (iv) 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the premises in which Agarbatti etc. were manufactured by house-hold ladies on behalf of the appellants were not factories as defined in Section 2(m) of the Factories Act, 1948 and that the appellants were not the manufacturer in respect of those goods. Regarding the first part of the arguments, he has also contended that from 1-3-1975 to 31-3-1979 there was an explanation below Item 68 of the Central Excise Tariff and in Notification No. 85/79-C.E., dated 1-3-1979 to the effect that the expression factory had the meaning assigned to it in Section 2(m) of the Factories Act, 1948. In the Notification No. 80/80-C.E., dated 19-6-1980 there was no explanation regarding the word factories used in the said Notification although there were five Explanations added to that Notification. The contention of the learned advocate is that the word factories in the Notification No. 80/80-C.E. should mean factories as defined in the Factories Act, 1948 and not in Section 2(e) of the Central Excises Salt Act, 1944. We have given our considered thought to this contention of the learned advocate, but we are unable to agree with him. This Notification 80/80-C.E. was issued under Rule 8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The goods were also to bear the brand name/ trade mark of the buyer. It was held by the Hon ble Supreme Court that the goods were manufactured by the seller as its own goods, and therefore wholesale price charged by the seller must form the true basis for the levy of excise duty. It was also observed by the Hon ble Supreme Court that the words manufacture and manufacturer have been defined by Clause (f) of Section 2 of the Central Excises and Salt Act, 1944 and what is relevant is that part of the definition which, defines a manufacturer of the goods as being any person who engages in their production or manufacture on his own account . In the case of Joint Secretary to Govt. of India v. Food Specialties Ltd. reported in 1985 (22) E.L.T. 324 (SC), the goods were produced with Customer s Brand/Trade Mark. It was held by the Hon ble Supreme Court that the value of goods under Section 4 of the Central Excises and Salt Act, 1944 should be the price at which the manufacturer sold the goods to the customer and the value of trade mark could not be added to the value for the purpose of excise duty. 6. In this case, the appellants supplied raw materials to the cottage type manufa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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