Assessee not liable for Central Excise Duty on goods supplied to manufacturers. Job workers deemed manufacturers.

The Tribunal held that the assessee was not liable for Central Excise Duty on goods supplied to Railway Wagon manufacturers and Electricity Boards. It determined that the job workers, not the assessee, were the manufacturers responsible for the duty. The Tribunal also accepted the validity of the trading goods claim by the assessee, ruling that these goods were not subject to excise duty. The Tribunal upheld the Commissioner's order, rejecting revenue appeals and allowing the appeals filed by the assessee and directors.

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Issues Involved:
1. Liability for payment of Central Excise Duty on goods supplied to Electricity Boards and Railway Wagon manufacturers.
2. Determination of the manufacturer for the purpose of excise duty.
3. Validity of the trading goods claim by the assessee.

Detailed Analysis:

1. Liability for Payment of Central Excise Duty:
The core issue revolves around whether the assessee is liable for paying Central Excise Duty on goods supplied to Electricity Boards and Railway Wagon manufacturers. The department's investigation revealed that no excise duty was paid on these supplies. The adjudicating authority initially confirmed the demand for excise duty amounting to Rs. 50,93,726/- along with interest and penalties. However, upon appeal, the Tribunal had to decide if the assessee or the job workers were liable for the duty.

2. Determination of the Manufacturer:
The Tribunal examined whether the assessee could be considered the manufacturer under Section 2(f) of the Central Excise Act, 1944, which includes any process incidental or ancillary to the completion of a manufactured product. The assessee procured raw materials, sent them to job workers, and supervised the manufacturing process. The job workers were paid only labor charges, and no excise duty was paid by them. The department argued that since the final inspection was done at the assessee’s premises, the assessee should be considered the manufacturer. However, the Tribunal concluded that the job workers, who transformed the raw materials into final products, should be considered the manufacturers. The inspection process at the assessee’s premises was deemed ancillary and did not constitute manufacturing.

3. Validity of the Trading Goods Claim:
The assessee claimed some goods as trading goods, which were procured from outside manufacturers and sold separately. The department presumed that trading was a cover for manufacturing through job workers. The assessee rebutted this by providing invoices and evidence of VAT payments. The Tribunal found no reason to dispute the trading goods claim and accepted that these goods were not liable for excise duty.

Conclusion:
The Tribunal concluded that:
- The assessee cannot be considered the manufacturer of goods supplied to Railway Wagon manufacturers and Electricity Boards.
- The respective job workers, who manufactured the goods, were liable for the payment of excise duty.
- The trading goods claimed by the assessee were genuine and not liable for duty.

The Tribunal sustained the order passed by the Commissioner dated 30/11/2012, rejecting the revenue appeals, and set aside the order dated 23/01/2009. Consequently, the appeals filed by the assessee and the directors were allowed.

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