2018 (11) TMI 915 - HC - Central Excise

Court upholds Assessee as 'Harrison' lock manufacturer. Tribunal decision overturned.

M/s R.P. Locks Co., Madar Gate, Aligarh Road, Aligarh and others Versus Commissioner of Central Excise, Lucknow And Commissioner Of Central Excise Lucknow Versus M/s R.P. Locks Co., Aligarh and Others

M/s R.P. Locks Co., Madar Gate, Aligarh Road, Aligarh and others Versus Commissioner of Central Excise, Lucknow And Commissioner Of Central Excise Lucknow ... Issues Involved:1. Whether the Tribunal was justified in holding the Assessee not a manufacturer of 'Harrison' brand locks.2. Whether the definition of 'manufacturer' in Section 2(f) of the Central Excise Act, 1944, covers the activities performed by the Assessee.3. Whether the Tribunal's judgment, which did not reverse the findings of the Commissioner of Central Excise, is sustainable.4. Whether the judgment in CCE, Baroda Vs. M.M. Khambhatwala is applicable to the case.Detailed Analysis:Issue 1: Justification of Tribunal's Decision on Manufacturer StatusThe court examined whether the Tribunal was justified in holding that the Assessee was not a manufacturer of 'Harrison' brand locks. The Tribunal had ignored the fact that the Assessee supplied parts/raw materials to laborers, paid them for assembling, and then performed processes like polishing, nickeling, and branding at its premises. The court concluded that these activities cumulatively result in the manufacture of a new item, i.e., locks of a particular brand, and thus amount to manufacturing as defined in Section 2(f) of the Central Excise Act, 1944.Issue 2: Definition of 'Manufacturer'The court evaluated whether the definition of 'manufacturer' under Section 2(f) of the Act includes the activities performed by the Assessee. It was determined that the inclusive definition of 'manufacturer' would cover the various activities referred to, such as supplying raw materials, assembling, and branding, thereby meeting the criteria under Section 2(f).Issue 3: Sustainability of Tribunal's JudgmentThe court reviewed whether the Tribunal could hold the Assessee not to be a manufacturer without reversing the findings of the Commissioner of Central Excise. The Tribunal's judgment was found unsustainable because it did not address or reverse the Commissioner's detailed findings regarding the Assessee's manufacturing activities.Issue 4: Application of CCE, Baroda Vs. M.M. KhambhatwalaThe court considered whether the judgment in CCE, Baroda Vs. M.M. Khambhatwala was applicable. It was concluded that the Tribunal wrongly applied this precedent, as the facts of the present case were different. The Assessee's activities went beyond mere branding and included significant manufacturing processes.Review Application Analysis:The review petitioners argued that there were factual and legal errors in the judgment dated 24.3.2017, including the lack of specific findings on the maintainability of the appeal. The court clarified that the grounds for review under Order 47 Rule 1 CPC are specific and do not include re-hearing an erroneous decision. The court emphasized that review jurisdiction is limited to correcting patent errors and not for re-evaluating the entire case.Conclusion:The court found no merit in the review application, stating that the judgment had addressed all relevant issues comprehensively. It was reiterated that the Assessee was indeed a manufacturer under Section 2(f) of the Central Excise Act, 1944, and the Tribunal's judgment was rightly set aside. The review application was rejected, with parties bearing their own costs.