TaxTMI 
TaxTMI 
1988 (2) TMI 385
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....icity Board in respect of PSC/PCC poles and RCC poles manufactured by them (falling under Item 60 CET) and why action should not be taken against all of them for imposing penalty, etc. The appellants replied contending that they were not the manufacturers of the poles, but it was only their contractors (to whom also the show cause notice had been issued) who were the manufacturers. Under order dated 17-11-1986 the Collector of Central Excise, Cochin rejected the said contention. He held that the appellants were the manufacturers of the poles and were, therefore, liable to pay excise duty. Taking note of the claim for exemption in respect of some of the RCC poles (under Notification 179/77) the Collector held that they were liable to pay app....
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....n view of the said decision he would not address us on the said question, though he does not abandon that contention. Following the said decision we hold that the poles are excisable commodities. 5. The main argument of Shri Panchu was that the Contractors were the actual manufacturers of the poles and the liability for payment of duty, if any, was only on the manufacturers and that the appellant Board was not the manufacturer and was under no liability to pay excise duty. In support of this contention he relied upon several tapes in the tender specifications , the subsequent agreements executed between the Board and the Contractors and certain other material. The said contention had been raised before the Collector also. The Collector h....
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....timated that the poles should be manufactured in accordance with the specifications of the Board. Under para 10(xi) the poles are directed to be marked with KSEB monogram and other particulars and in para 10(xiii) the casting is directed to be done under the departmental supervision. It is also not in dispute that the cement and steel required for the manufacture of poles was to be provided by the Board as also the electricity on payment of the usual charges. It is also agreed that in two places the yard of the Board was made available to the contractor for carrying out his work. But in this connection it is pointed out by Shri Panchu that in respect of these two places the right to make use of the Board's property was also taken into consi....
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....r hand, there are conditions which would establish that the agreement between the Board and the Contractors was on principal to principal basis. For instance, the liability for loss, if any, due to damage to the poles arising out of faulty electric supply was to rest with the contractors only. Similarly the cost of the poles lost by destructive testing. There is also a clause allowing for escalation in rates. There is also a provision for levying of penalty on the contractors for late delivery of the poles. These conditions would be inconsistent with the Board itself being the manufacturer. It may also be noted that except for supply by the Board of cement and steel, the contractors were to make their own arrangements in respect of not mere....
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....mal terms and conditions as would apply to any other individuals. The contractors were to invest their own money in the other machinery and material required for the manufacturing operations. The contractors were entitled to work at their own schedule though they were bound to manufacture a minimum quantity during a stipulated period. Loss arising during the course of manufacture, either due to failure of electricity leading to defective poles or for destruction at the time of testing, was to be borne by the contractors only. The contractors were liable to penalty also. These terms, when taken together would establish that the contractors were independent workmen and not the hired labour of the Board. 10. This Tribunal considered similar....