9911796707
TMI Blog2017 (3) TMI 1721X X X X Extracts X X X X X X X X Extracts X X X X ..... d is a manufacturer of lock and not that it is engaged in only furnishing and branding. Appeal allowed - decided in favor of Revenue. - FIRST APPEAL FROM ORDER No. - 686 of 2004 - - - Dated:- 24-3-2017 - Mr. Sudhir Agarwal And Ravindra Nath Mishra, JJ. For the Appellant : K.D Nag, Deepak Seth For the Respondent : S.M.K. Chaudhary, Chandra Shekher Pandey ORDER 1. Heard Sri Dipak Seth, Advocate, for appellant and Sri M.P. Devnath, Advocate, assisted by Sri Chandra Shekhar Pandey, Advocate, for respondents. 2. This is an appeal filed by Commissioner of Central Excise, Lucknow (hereinafter referred to as Revenue ) under Section 35G of Central Excise Act, 1944 (hereinafter referred to as Act, 1944 ) arising from judgment and order dated 17.12.2003 passed by Customs, Excise and Service Tax Tribunal, West Block No. 2, R.K. Puram, New Delhi. It was admitted on following substantial questions of law: i) Whether the Tribunal was justified in holding Assessee not manufacturer of Harrison brand locks ignoring the fact that parts/raw material for assembling locks used to be supplied by Assessee to labourers, who are paid wages for such assembling and assemble ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ey Locks and Assessee were simultaneously searched by Officers of Central Excise, Lucknow on 29.09.2000 6. At the premises of both and inventory of locks were drawn and stock of raw materials taken. At the Factory premises of M/s Key Locks a shortage of 4116 pieces of Harrison Brand Locks valued at ₹ 2,09,916.00 involving duty of ₹ 33,587.00 was detected. Besides, raw materials, viz., C.R. Strips weighing 2000 K.G. and M.S. Wire weighing 5500 K.G. were also found lying in factory premises for which balances were not drawn in RG-23-A Pt-I. A statement dated 29.09.2009 of Shri Ravi Jain, Authorized Signatory was recorded, who stated that shortage of 4116 locks might have occurred due to negligence of staff. 7. At the business premises of Assessee, Harrison brand locks valued at ₹ 1,36,33,072.00 were found for which Panchnama dated 29.09.2000 was prepared. Statement of Sri Anil Monga, partner of Assessee-Firm was recorded on the spot in which he said that he is getting branded Harrison locks manufactured from M/s Key Locks who is registered with Central Excise Department and locks from small dealers at Aligarh, whereupon his Firm put on their labels/ stickers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Shri Rajendra Pal Singh, M/S Remy Industries. (ii) Statement dated 06.11.2000 of Shri Chandra Prakash Sharmna, authorized signatory, M/s Pawan Engineers, Begum Bagh, Aligarh. (iii) Statement dated 06.11.2000 of Shri Hoti Lal. (iv) Statement dated 06.11.2000 of Shri Chandra Prakash Sharma, Prop. M/s Vikas Engineers. (v) Statement dated 07.11.2000 of Shri Vishnu Bhagwan. (vi) Statement dated 07.11.2000 of Shri Manoj Sharma. (vii) Statement dated 08.11.2000 of Smt. Brijesh Kumari. (viii) Statement dated 08.11.2000 of Shri Ram Pal, son of Shri Dharam Jeet. (ix) Statement dated 08.11.2000 of Shri Panna Lal. (x) Statement dated 08.11.2000 of Shri Ram Pal, son of Shri Poshaki Lal. 11. Revenue Authorities found that Assessee was getting unbranded locks supplied by various industries like Remy Industries, M/s Vikas Engineers, M/s Pawan Engineers which were not ready to market conditions. Statements of Hoti Lal, Vishnu Bhagwan, Manoj Sharma, Brijesh Kumari, Ram Pal son of Dharam Jeet and Ram Pal, son of Poshaki Lal show that against verbal orders, they have manufactured locks after receiving raw material or financial assistance from Assessee. Sample of locks ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lage and cottage industry in and around Aligarh. Assessee purchases locks from many artisans in the area. 15. The Assessee undertakes the work of polishing, packing, branding and fixation of MRP which functions cannot be construed as 'manufacture'. Assessee does not bring into existence a new lock by assembling its parts, which function is undertaken by suppliers and manufactures, like M/s Key Locks etc. The activities undertaken by Assessee is only to make the goods marketable and there is no change in the nature of goods. 16. Learned counsel for Assessee placed reliance on several authorities which we propose to discuss at a later stage. From the record, we find finding of fact that Assess itself or through another Agency used to supply material parts to the Artisans or other Industries for assembling purposes and signatures are taken on blank vouchers. The parts made available by Assessee or on its behalf, consisted of, upper and lower plates, shackles, levers, keys etc. and where parts are not made available, finance to purchase those parts are provided by Assessee. The locks, therefore, were assembled at the behest of Assessee, who was supplier of parts directly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e in a substance', however minor in consequence the change may be. Court further observed that 'Manufacture' implies a change, but every change is not manufacture and yet every change of an article is the result of treatment, labour and manipulation. But something more is necessary and there must be transformation; a new and different article must emerge having a distinctive name, character or use. Therein the question arose whether in the process of neutralisation by alkali and bleaching by activated earth and/or carbon, raw oil is treated to prepare non-essential vegetable oil and whether it amounts to 'manufacture' or not. It was answered in negative. 20. In Lathia Industrial Supplies Co. Pvt. Ltd. Vs. Collector of Central Excise, Baroda, 1987 (29) E.L.T. 751 (SC), Court held that rubberizing or relining of old and used rollers does not amount to manufacture. 21. The authorities can be multiplied but sum and substance of the authorities is that mere affixation, mere polishing, mere branding, mere minor treatment of rendering the goods marketable would not amount to 'manufacture' and in order to constitute 'manufacture' there must be so ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of lifting of the raw materials to the platform mixing coke and lime and then feeding into the kiln and burning. These operations are so interrelated that without anyone of these operations manufacturing process is impossible to be completed. Therefore, if power is used in anyone of these operations or anyone of the operations is carried on with the aid of power, it is a case where in or in relation to the manufacture the process is carried on with the aid of power. Court also observed that until some change takes place and commodity retains a continuing substantial identity through the processing stage, we cannot say that it has been manufactured, but that does not mean that any operation in the course of such process is not in relation to the manufacture. Court further held as under: We are, therefore, of the view that if any operation in the course of manufacture is so integrally connected with the further operations which result in the emergence of manufactured goods and such operation is carried on with the aid of power, the process in or in relation to the manufacture must be deemed to be one carried on with the aid of power. In this view of the matter, we are unable to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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