Excise manufacturer status depends on direction and control over production, not mere purchase under brand name.

For excise licensing, a buyer is a "manufacturer" only if it produces goods itself or gets them made under its direction and control. A mere purchaser who places orders with an independent factory, even for goods made to its specifications and sold under its brand name, is not engaged in manufacture on its own account. The use of a trade mark or common directorship, without evidence of supervisory control or manufacturing responsibility, is insufficient to treat the buyer as a manufacturer. On that basis, the licence demand under Rule 174 was unsustainable.

---

---

Issues: Whether a buyer who places orders with an independent factory to manufacture goods according to its specifications and under its brand name can be treated as a "manufacturer" for the purposes of excise licensing under Rule 174 read with the definition in Section 2(f) of the Central Excises and Salt Act, 1944.

Analysis: The amended definition of "manufacturer" in Section 2(f) covers, apart from a person employing hired labour, a person who engages in production or manufacture on his own account. That expression was construed to require more than a mere purchase arrangement: the person must get the goods manufactured under his direction and control and must be sufficiently involved in the manufacturing activity itself. A buyer who only places orders, even for goods made to its specifications and sold under its trade name, but who does not control the manufacturing concern, does not supervise production, and does not incur the manufacturing responsibility, remains only a buyer. The use of a trade mark or brand name does not, by itself, make the user the manufacturer. The existence of common directorship was also held insufficient to treat the manufacturing company as a dummy concern in the absence of evidence of control or camouflage.

Conclusion: Such a buyer is not a manufacturer within Section 2(f) and cannot be required to obtain a manufacturing licence under Rule 174. The notices demanding a licence were unsustainable.

Ratio Decidendi: A person is a "manufacturer" for excise purposes only if the goods are produced by him or under his direction and control; a mere purchaser of goods manufactured by an independent concern, even under its own brand name or specifications, is not a manufacturer.

---