Appellant not liable for excise duty despite claiming manufacturer status without proof of actual manufacturing activity under Section 2(f)

CESTAT Kolkata held that appellant was not liable for excise duty despite claiming manufacturer status in tender documents. Department failed to prove actual manufacturing activity at appellant's premises. Evidence showed goods were manufactured at job worker's premises, making job worker liable under Section 2(f) of Central Excise Act, 1944. Following precedent in Comet Technocom case, tribunal ruled appellant cannot be held liable merely for claiming manufacturer status without establishing actual manufacturing activity. Lower authority's order set aside, appeal allowed on merits and limitation.

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Issues:
1. Whether the appellant can be considered a manufacturer and held liable for Central Excise duty.
2. Whether the show cause notice issued to the appellant is barred by limitation.

Analysis:
1. The appellant, a proprietorship firm, procured machineries for manufacturing hardware fittings. The appellant disputed being classified as a manufacturer, as they got goods manufactured from job workers and did not exceed the SSI exemption limit. The department alleged the appellant declared themselves as manufacturers in bid documents and embossed goods with their name, implying manufacturing. The Tribunal noted the appellant's compliance with contract conditions and buyer satisfaction but emphasized the need for actual manufacturing to establish liability. The Tribunal cited precedents where similar demands were set aside, emphasizing that a trader cannot be equated with a manufacturer.

2. The appellant contested the show cause notice on grounds of limitation, arguing that the notice covered periods prior to its issuance. They claimed the department had knowledge of facts from earlier investigations. The appellant maintained they were not required to register or pay Central Excise duty during the relevant periods due to low clearances. The Tribunal agreed with the appellant, highlighting that mere declarations in bid documents do not establish manufacturing liability. Citing legal precedents, the Tribunal held that excise duty is on manufacture, not sale, and ruled in favor of the appellant, setting aside the lower authority's order and allowing the appeal on merits and limitation.

Conclusion:
The Tribunal concluded that the appellant could not be considered a manufacturer solely based on bid declarations and upheld the appellant's argument regarding limitation. The order of the lower authority was set aside, and the appeal was allowed, entitling the appellant to any consequential relief.

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