TMI Blog1993 (6) TMI 86X X X X Extracts X X X X X X X X Extracts X X X X ..... be treated as 'manufacturer' under Section 2(f) of the Central Excise Act regarding the goods received from the second respondent or the second respondent is to be treated as 'manufacturer' of those goods. The second respondent is an independent legal entity and it does similar job works for other industries like Brakes India, Sundaram Clayton, etc. It is stated in the affidavit filed in support of the writ petition that an identical issue arose in the year 1981, and, after the petitioner explained the position, the Excise Department treated only the second respondent or similar job worker as 'manufacturer' and not the petitioner. However, the petitioner received a show-cause notice dated 1-6-1983, calling upon it to show cause why it (petitioner) should not be treated as manufacturer of ancillary goods such as studs, locking bolts, plugs, specian pins, etc. on the basis that the petitioner supplied raw materials to the second respondent for the manufacture of the abovesaid ancillary goods. According to the Revenue, in view of the inclusive definition of 'manufacture' under Section 2(f) of the Central Excises and Salt Act, (hereinafter referred to as 'the Act'), the petitioner is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... judgments of the Supreme Court, this Court and other High Courts, submitted that the stand taken by the first respondent on the facts and in the circumstances of the case, that the petitioner is to be considered as 'manufacturer' for the purpose of Section 2(f) of the Act is totally unwarranted and, therefore, the impugned Orders are to be quashed by issuing a writ of certiorari as prayed for. He also submitted that the reliance placed by the first respondent on the judgment of the Supreme Court in M/s. Shree Agency v. S.K. Bhattacharjee and Others reported in A.I.R.1972 S.C. 780 = 1977 (1) E.L.T. (J 168) (S.C.), divorced from the facts of that case, is again not warranted. According to the learned Counsel, the said decision of the Supreme Court has to be confined only to the peculiar facts of that case and the Supreme Court has not laid down any ratio in that case which is applicable generally. He also submitted that the first respondent has distinguished the cases relied on by the petitioner without appreciating the similarity of facts between the petitioner's case and those cases. The cases cited by the learned Counsel for the petitioner in support of this writ petition are the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ency was the real manufacturer of cotton fabrics which were manufactured by 16 weavers to whom Shree Agency used to supply yarn. The facts found in that case were that Shree Agency was issuing yam to the powerloom weavers on credit and getting the same duly woven by them. The powerloom weavers were paid weekly payments and were supplied yam worth several thousand rupees on credit. Shree Agency was not in a position to know what amount was recoverable from the powerloom weavers to whom they had supplied yam on credit and advanced money every week. It was under those circumstances that looking to the nature of the transaction between Shree Agency and those powerloom weavers the authorities had come to the conclusion that Shree Agency was the real manufacturer of the cotton fabrics. The Supreme Court did not think it fit to interfere with that finding and therefore, the view taken by the authority was confirmed and the appeal filed by Shree Agency was dismissed. The facts of this case are quite different from the facts of the case of Shree Agency and, therefore, this decision does not support the contention raised on behalf of the respondents." With respect, I agree with the above v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e notice and the effect of a subsequent trade notice clarifying the earlier one. 9. Let me now consider the decisions cited by the learned Counsel for the petitioner. 10. In 1988 (38) E.L.T. 535 (supra), a Constitutional Bench of the Supreme Court has observed in para 37 as follows :- "One more aspect will have to be reiterated. Computation of the assessable value is one question and as to who should be liable for the same is another. Duties of excise are imposed on production or on manufacture of goods and are levied upon the manufacturer or the producer in accordance with the relevant rules. This is quite independent of the ownership of goods. It is, therefore, necessary to reiterate that the value for the assessment under Section 4 of the Act will not be the processing charge alone but the intrinsic value of the processed fabrics which is the price at which the fabrics are sold for the first time in the wholesale market. The rules are clear on the computation of that value. If the valuation is made according to the rules as adumbrated in Empire Industries (supra) and as clarified by my learned brother in this judgment no difficulty should arise." 11. In 1985 (22) E.L.T. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tices were purported to have been issued under Rule 10A of the Central Excise Rules, 1944. Thereupon the petitioner, made a written representation to the Assistant Collector, Central Excise that the demands were not valid and enforceable in law. But the Assistant Collector by his order dated 17-1-1967 rejected the contention of petitioner. He, however, gave direction to revise the demands in accordance with the rates of duty current for the different periods. Pursuant to it three demand notices dated 18-3-1967 for various amounts were issued. The petitioners filed an appeal to the Collector, Central Excise but the appeal was rejected and the demands were confirmed. A revision petition filed to the Central Government also met with the same fate. The petitioner was, therefore, obliged to file the writ petition." In that case, the learned Judges held as follows :- "The last contention on behalf of the petitioner is that he does not come within the definition of manufacturer and as such cannot be held liable for the excise duty. The definition of 'manufacture' in the Section is to the following effect. "2(f) manufacture includes any process incidental or ancillary to the completi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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