Actual manufacturer requirement defeats loan licencee claim to registration for concessional import benefits under the Rules.

Under the Customs (Import of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 1996, only the person who actually manufactures the goods can be treated as the manufacturer for registration and concessional import purposes. A loan licencee that does not itself manufacture and has no factory cannot claim manufacturer status merely because it is connected to the manufacturing arrangement. The Tribunal treated the Supreme Court's later view as decisive and distinguished earlier contrary decisions. On that basis, the loan licencee was held ineligible for registration as a manufacturer under the Rules, and the cancellation of registration was upheld in substance.

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Issues: Whether a loan licencee, who does not itself manufacture goods and has no factory, can be treated as a manufacturer for registration and operation under the Customs (Import of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 1996.

Analysis: The Tribunal held that the earlier decisions relied on by the Commissioner (Appeals) did not prevail in view of the later decision of the Supreme Court, which recognised that in such a manufacturing arrangement the job worker is the manufacturer and the loan licencee is not. Once the loan licencee is not the manufacturer, it cannot claim registration as a manufacturer for availing the concessional import facility under the Rules. The distinction between the person who actually manufactures and the brand owner or loan licencee was treated as decisive.

Conclusion: The loan licencee could not be treated as a manufacturer and was not entitled to registration as such under the Rules.

Final Conclusion: The revenue's challenge succeeded, and the order cancelling the registration was restored in substance by holding that only the actual manufacturer could be registered for the concessional import scheme.

Ratio Decidendi: For the purpose of concessional import benefits linked to manufacture, only the person who actually manufactures the goods can be treated as the manufacturer, and a loan licencee without manufacturing activity cannot be granted registration as such.

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