Central excise duty liability cannot be fastened on a subsequent purchaser who is not the manufacturer or first dealer.

Rule 7 of the Central Excise Rules, 1944 fastens duty liability on the person who produces, cures, manufactures or warehouses excisable goods. A subsequent purchaser who is neither the manufacturer nor the first dealer from the manufacturer cannot be treated as liable under that rule. Departmental action imposing duty and penalty on such a purchaser was beyond the scope of the rule and lacked jurisdiction. The proceedings were therefore quashed, the imposition of duty and penalty was set aside, and consequential refund relief followed.

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Issues: Whether duty and penalty could be fastened on a purchaser who was neither the manufacturer of the excisable goods nor the first dealer purchasing from the manufacturer.

Analysis: Rule 7 of the Central Excise Rules, 1944 places the duty liability on the person who produces, cures or manufactures excisable goods, or who stores such goods in a warehouse. The appellant was only a subsequent purchaser and was not shown to be the manufacturer of the goods in question. On that footing, the departmental action fastening duty liability and penalty on him was beyond the scope of the rule and therefore lacked jurisdiction.

Conclusion: The imposition of duty and penalty on the appellant was unsustainable and was set aside.

Final Conclusion: The proceedings against the appellant were quashed and the appeal succeeded with consequential refund relief.

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