9911796707
TMI Blog1980 (2) TMI 288X X X X Extracts X X X X X X X X Extracts X X X X ..... any is the registered proprietor in India of certain trade marks, namely, Aerolite, Melocol, Melolam, Resicart and Araldite. 2. By an agreement dated 24th March, 1971 (referred to hereafter as the "first main agreement") entered into between one Cibatul Ltd. and the petitioner-company (then known as "Ciba of India Ltd."), the latter agreed to purchase from Cibatul Ltd. two types of resins known as "Urea Formaldehyde" and "Melamine Formaldehyde" on certain terms and conditions. By a tripartite agreement dated 7th December 1971 (referred to hereafter as the "subsequent agreement") entered into between the petitioner-company (then known as "Ciba of India Ltd.") Cibatul Ltd. and the f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... turer". It was further stated that it had been decided by Government that a person or persons, firms or companies who have no factory of their own and who got excisable goods manufactured by duly licensed factories of other manufacturers according to their own specifications or under their own brand or trade names were required to be licensed under the Central Excise Law. By this letter the petitioner-company was informed that it was required to take out a licence under Rule 174 of the Central Excise Rules, 1944. In reply, by its letter dated 10th March 1976, the petitioner-Company requested the Superintendent of Central Excise to let the petitioner have a copy of the decision of the Union of India referred to in the Superintendent' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ounsel appearing on behalf of the respondents, that the petitioner-company was the manufacturer of the products within the meaning of Section 2(f) of the Act, because the petitioner-company had control and direction over their manufacture by reason of certain clauses in the main agreements. 6. In order to adjudicate upon these rival contentions it would be necessary to analyse the main agreements. It may be stated that the terms and conditions contained in both the main agreements are identical with the only difference being the name of the product agreed to be sold by Cibatul Ltd. to the petitioner-company. It will, therefore, be sufficient to refer to the terms and conditions of the first main agreement, as a reference to the same terms ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... conditions in the agreement are not germane for the present controversy between the parties. 8. Reading this agreement in its entirety and particularly the clauses paraphrased earlier, there can hardly be any room for doubt that an agreement pure and simple of the sale to the petitioner-company of the products manufactured by the seller, viz. Cibatul Ltd., and that the status of the contracting parties, namely, Cibatul Ltd. and the petitioner-company, is that of seller and purchaser. All that Cibatul Ltd. did was, in fact, to manufacture the contract goods which it agreed to sell to the petitioner-company on the terms and conditions contained in that agreement. That such was the status and relationship of the contracting parties, is also b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the goods were manufactured by Cibatul Ltd. according to the quality prescribed by the petitioner-company; (ii) the goods manufactured Cibatul Ltd. had to be of the buyer's standard; (iii) the buyer was entitled to test a sample of each batch of the contract products manufactured by the seller; and (iv) each batch would be released by the seller to the buyer only on the latter's approval. It is not difficult to repel this contention urged by Mr. Mehta. Merely because a buyer stipulates that the goods which he has agreed to purchase from the manufacturer must be of the quality required by the buyer, and merely because in order to ensure that the seller does, in fact, manufacture the goods of the requisite quality, and merely because ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... report it was observed as under: Those observations do not advance the case of the department in any way, because these observations also clearly show that the manufacturer would include not only a person who employs hired labour in the production or manufacture of goods, but also any who engages in the production or manufacture of goods on his own account if the goods are intended for sale.... 11. Mr. Mehta finally urged that the products entered the stream of trade as the products of the petitioner company and hence the petitioner-Company must be deemed to be the manufacturer. This contention is fallacious. The products manufactured by the seller, namely, Cibatul Ltd., did not change when they entered the stream of trade merely becaus ..... X X X X Extracts X X X X X X X X Extracts X X X X
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