1995 (10) TMI 119 - AT - Central Excise

Manufacturing status not conferred by control over process. Tribunal affirms decision.

The Tribunal upheld the decision in favor of the respondent, determining that the Gujarat Electricity Board was not the manufacturer of prestressed ... Manufacturer Issues:Interpretation of job work contract for fabrication of prestressed concrete poles, determination of manufacturer status based on control over manufacturing process and raw material supply, applicability of quality control in determining manufacturing status.Analysis:The case involved an appeal against an order passed by the Collector, Central Excise (Appeals) Ahmedabad regarding the manufacturing status of the Gujarat Electricity Board in relation to the fabrication of prestressed concrete poles under a job work contract with contractors.The Assistant Collector had initially deemed the Board as the manufacturer due to its control over the manufacturing program and production process, leading to a demand against the respondents. However, the Collector (Appeals) reversed this decision, emphasizing that mere supply of raw materials and manufacturing as per specifications did not automatically confer manufacturer status unless the actual manufacturer was a dummy of the supplier.The Revenue contended that the Electricity Board should be considered the manufacturer because of its supply of raw materials and control over labor wages and quality. They argued that the Tribunal's decision in a similar case was distinguishable and cited relevant case law to support their position.On the other hand, the respondent argued that the Collector (Appeals) was correct in finding no infirmity in the initial decision. They emphasized that the control exercised by the Board did not make them the manufacturer and distinguished the cited case law as not directly applicable to the present situation.Upon examining the contract conditions between the Board and the contractors, the Tribunal agreed with the Collector (Appeals) that the prestressed concrete poles were fabricated on a job work basis, with the Board providing raw materials and ensuring quality control. The Tribunal concurred that the Board could not be deemed the manufacturer unless the actual manufacturer was a dummy of the supplier, as per the terms of the contract.The Tribunal upheld the decision in favor of the respondent, citing the precedent set by the Kerala State Electricity Board case, which was supported by the Supreme Court. It distinguished other cases cited by the Revenue, emphasizing the unique circumstances of each case and the lack of direct relevance to the present matter.Ultimately, the Tribunal rejected the Revenue's appeal, following the precedent set by the Kerala State Electricity Board case and affirming the decision in favor of the respondent.