Job-worker clearances and brand-name stencilling were not manufacture, so small scale exemption could not be denied.

Clearances of goods manufactured by independent job workers could not be clubbed with the appellant's own clearances for denial of small scale exemption because the job workers were genuine manufacturers and the appellant's supply of raw material did not make it the excise manufacturer. The appellant's own production was separately accounted for, so there was no basis to aggregate the clearances. Affixing the brand name by stencil in the godown was not a manufacturing activity. The resulting demand of duty and penalty were therefore unsustainable.

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Issues: Whether the clearances of goods manufactured by job workers could be included in the appellant's clearances for denial of small scale exemption and consequent demand of duty, and whether affixing the brand name in the godown amounted to manufacture.

Analysis: The goods in question were admittedly manufactured by independent job workers and the Revenue did not allege that those units were fake or incapable of manufacture. Mere supply of raw material by the appellant and receipt of finished goods from job workers did not make the appellant the manufacturer for excise purposes. The goods manufactured at the appellant's own unit were separately accounted for, and there was no basis to club the job-worker clearances with the appellant's own clearances for the purpose of exemption eligibility. The mere affixing of the brand name by stencil in the godown was not a manufacturing activity.

Conclusion: The job-worker clearances could not be included in the appellant's clearances, and affixing the brand name in the godown did not amount to manufacture. The demand of duty and penalty were unsustainable.

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