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TMI Blog2006 (11) TMI 84X X X X Extracts X X X X X X X X Extracts X X X X ..... s. Indian Rayon and Industries Ltd. (An unit of Madura Garments Division) 2. The appellants would place orders on various inputs and the suppliers would send the inputs directly to the job workers, who would avail Cenvat Credit and manufacture Ready Made Garments (RMG). The RMG would be affixed with the brand name of the appellant. The job worker would clear the RMG in bulk condition. Duty would be paid by the job worker on the RMG cleared in bulk condition on a value arrived at on the basis of cost of raw materials plus the processing charges. On receipt of the RMG, each RMG would be removed from the bulk pack to retail pack and put in individual polythene cover. The price tag would be affixed to each RMG. In the case of shirts, the said goods are thereafter put in a product box. A label indicating the style code, the price of the RMG, the size is affixed to the product box together with a small piece of the fabric, commercially known as swatch. Each RMG is thereafter arranged and stored for further transportation for which purpose they are put in a corrugated box. The appellants availed the benefit of exemption Notification 38/2003-C.E., dated 30-4- 2003 exempting garment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onsideration. There is no condition that there should be transfer of property in the goods. Further, the definition does not contain any stipulation regarding quantum of consideration. So long as, there is transfer of possession of goods from one person to another for a consideration, the definition of sale and purchase in Section 2(h) of the Central Excise Act, 1944 is satisfied. (iv) The Apex Court in the Ujagar Prints case as reported in 1988 (38) E.L.T. 535 (S.C.) in the context of valuation of goods manufactured by the job worker has clearly held that the job worker's premises would be the deemed factory gate, as if the processed goods have been sold by the processor. In the present case, the appellants had paid the job workers the job charges and that there has been a transfer of possession from one person to another. Once the transfer of possession of the garments has taken place from the job worker to the appellants for a consideration, the conditions specified in the Notification are satisfied. (v) The following case laws are relied on: (a) Rado Tyres Ltd. v. CCE - 2004 (174) E.L.T. 218. (b) CCE v. Video Master - 1996 (88) E.L.T. 117. (c) CCE v. Moldtek Plastics ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nfirmed in the impugned order itself, is not sustainable, the demand for interest under Section 11AB of the Central Excise Act is also not sustainable. E/1003/05 M/s. Levis Strauss (India) Pvt. Ltd. v. CCE, Bangalore-I Commissionerate 4. The appellant is a dealer/trader in RMG, which have the name Levis and Dockers on them. These goods were got manufactured by the appellant from independent contract manufacturers on payment of job charges, after supply of inputs such as fabrics/accessories. After paying duty, the job workers send the goods to another unit called Vishesh Enterprises who did the activity of affixing MRP, tagging, packing and labelling the goods. The goods were thereafter sold obtaining space at the premises of a concern called MERX Logistics. Revenue issued Show Cause Notice dated 21-3-2005 to the appellant on the ground that the goods were not entitled to the benefit of Notification No. 38/2003-Central Excise, dated 30-4-2003 and the appellants alone are required to pay the duty. The reason for denying the exemption Notification is that the Notification in question would apply only when there is a 'purchase' or 'sale' of goods. But in the present transaction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and also Rado Tyres in 2004 (174) E.L.T. 218 (T); (b) BPL Ltd. v. CCE - 2000 (124) E.L.T. 836 (T); (c) CCE v. APSEB - 2002 (147) E.L.T. 290; (d) Mark Auto Industries Ltd. v. CCE - 2003 (159) E.L.T. 311(T) (e) Pratap Steel Rolling Mills (P) Ltd. v. CCE - 2001 (137) E.L.T. 741(T) (f) CCE v. Video Master -1996 (88) E.L.T. 117 (T). E/290/2006 - M/s. Arvind Clothing Limited v. CCE, Bangalore-I Commissionerate 6. The appellants supply all inputs for manufacture of garments to the job workers and the inputs are consigned to them. The inputs are duty paid. The job workers receive the input, take Cenvat credit and manufacture garments. They clear the garments in bulk on payment of excise duty valuing the goods under Section 4 (on the value of raw materials + job charges). These garments are sent back to the warehouse of the appellant. On receipt of the duty paid garments in bulk into their warehouse, the appellant carries out price tagging, stickering, washing instructions, tagging and retail packing. The goods were cleared by availing exemption Notification 7/2003-Central Excise as amended by Notification No. 38/2003. Revenue issued Show Cause Notice to the appellants al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s always rests with the appellant. There is actually no 'purchase' of the goods from the job worker. In these circumstances, the benefit of the Notification cannot be extended. The appellants con tended that the transaction amounts to "sale" in terms of Section 2(h) of the Central Excise Act. Even though the appellants relied on 5 case-laws to press their point that the transaction amounts to sale/purchase, the Commissioner has observed that the said case-laws are not applicable to the present cases. According to him, the case-laws are in connection with the availment of Modvat credit. According to the Commissioner, the said case-laws cannot be taken as a general ruling on the definition of 'sale' or 'purchase' that has limited application. We find that the said Notification has not defined 'sale' or 'purchase'. In the absence of such a definition in the Notification, we have to go by the definition given in the Central Excise Act. According to Section 2(h) of the Central Excise Act "Sale' and 'purchase' with their grammatical variations and cognate expressions, to mean any transfer of the possession of the goods by one person to another in the ordinary course of trade or business ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are sent to the contract manufacturers or job workers. The job workers carry out the manufacture of garments and clear them in bulk packing on payment of duty. They are actually sending the bulk goods to Vishesh Enterprise. Vishesh Enterprises carry out the activity of affixing MRP, tagging, usage instructions, labeling, re-packing, etc. Vishesh Enterprises send the goods to MERX Logistics India. The goods are sold from there. It is the contention of the appellant that they are not manufacturers. They have relied on the Apex Court's decision in the case of CCE v. M. Khambatwala (supra) decision. In the said case, it was held that when the goods were produced on piece rate basis out of raw materials supplied by the person paying wages, the jobbers were the manufacturers and sale or ownership of raw material was not at all relevant. In the above- mentioned case, the question arose as to whether the Respondents are manufacturers of agarbatti, amlapodi and dhup etc., even though they were manufactured in various premises of the household ladies outside the factory of the Respondents. The Apex Court held that the ownership of the end product is irrelevant and the job workers are only th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f taxable event under the Central Excise." 9.2 We find that the ratio of the Apex Court decision is dearly applicable to the present case. In Para 23 of the OIO, the Adjudicating Authority has examined the appellant's contention that they are not the manufacturers. He has observed that under 2(f) of the Central Excise Act, it is not necessary that only the person who carries on the actual process of manufacture is the manufacturer. Even, so called trader can be a manufacturer if he gets the goods manufactured on his account. He has further stated that the appellant did not follow the procedure prescribed in Rule 12B authorising the job worker to observe procedure relating to Central Excise Rules and, therefore, the liability to pay duty devolves on the person who gets RMGs produced. There is no discussion of the ratio of the Supreme Court decision in the OIO. In our view, the Supreme Court's decision is squarely applicable to the present case and in the light of the facts on record, we have to hold that that the appellant M/s. Levi Strauss (India) Pvt. Ltd. are not the manufacturer in the present case. Even, if it is assumed that they are the manufacturers, they would be entitl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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