TaxTMI 
TaxTMI 
2014 (8) TMI 1047
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....d labour. This was recorded by letter dated 20-9-1993 addressed by Chandan Processors to Sant Processors, which is as follows :- "From : M/s. Chandan Processors, 109, Cavel Street, I Floor, Kalbadevi Road, Bombay 400 002 September 20, 1993 To M/s Sant Processors, 44-D, Safed Pul, Andheri Kurla Road, Sakinaka, Bombay - 400072 Dear Sirs,   Re : Agreement to conduct your unit at Sakinaka on conducting basis. I thank you for arriving at the agreement allowing me to conduct your Process House situated in part of the 1st Floor at 44-D, Safed Pul, Andheri-Kurla Road, Sakinaka, Bombay 400072. Accordingly, I have today, i.e. on September 20, 1993, taken charge of your Plant/Machinery at the above premises in accordance with the terms and conditions of the said agreement for running the unit. From today, I shall be responsible for payment and discharge of all dues and liabilities, including the social and statutory, viz : Central Excise Duty, Sales Tax, Labour Welfare Board dues, etc. The formal agreement shall....
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....nce 9.75 lakh mtrs. were cleared by him without payment of duty and that he undertook to pay the duty so evaded. (b) that he had maintained the seized Collection Book No. 24 which was the Collection Book of Chandan Processors and which contained the details of the fabrics cleared by him clandestinely. 2.5 During the period, June to Nov.'94, the department also recorded statements of K.N. Mehta of Ram Processors wherein he stated as follows : (a) that from 1-3-1994 he was carrying on the processing of fabrics in the factory premises of 'Sant Processors' and that he had employed the workers and he was receiving the grey fabrics from his parties and that he would pay the duty on clearances from March '94 to May '94. (b) that the seized collection book No. 25 was written by his clerk, Ramesh. 2.6 In his statements, Mr. Satinder Pal Singh Ahuja, stated that from Sept.'93 they had given on license the premises to Chandan Processors/Ram Processors. 2.7 Statements of suppliers of grey fabrics were recorded wherein they stated that they had dealt with Chandan Processors/Ram Processors. 2.8 During investigations letters were writt....
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....cessing and who returned the grey fabrics after processing, and based on these findings to decide the person who was liable to pay the duty. 4. After having heard Counsel for the appellants and the learned authorized representative for the department and on going through the records, it is seen from the following evidence that merchants had supplied the grey fabrics to Chandan Processors/Ram Processors (Raju Lakhwani/K.N. Mehta) and not to the appellants and the processing was carried out by Chandan Processors/Ram Processors : (a) Statements of Raju Lakhwani of Chandan Processors in which he has stated that he had started processing fabrics since Sept. '93 in the factory premises of Sant Processors and that he had cleared 10 lakh mtrs of processed fabric. He had paid duty on 25,000 mtrs and the balance 9.75 lakh mtrs. were cleared by him without payment of duty and that he undertook to pay the duty evaded. He has further stated that he had maintained the seized Collection Book No. 24 which was the Collection Book of Chandan Processors and which contained the details of the fabrics cleared by him clandestinely. (b) Statements of K.N. Mehta o....
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....and processed by Chandan Processors/Ram Processors who hired the labour and the processing was on their account, as is evident from the fact that the suppliers of the grey fabrics have in their statements stated that they had supplied the grey fabrics to Chandan Processors/Ram Processors and dealt with them. Thus Chandan Processors/Ram Processors were the manufacturers and not the appellants. By giving the factory on license, the appellants did not become manufacturer. 4.4 The fact that the Excise registration was not taken by Chandan Processors/Ram Processors despite they undertaking the manufacture, was a contravention on the part of Chandan Processors/Ram Processors and merely because the Excise registration continued in the appellant's name, it cannot be said that the goods were manufactured by the appellants. The taxing event is manufacture and not central excise registration and hence the excise duty liability is on the manufacturers which in the present case were Chandan Processors/Ram Processors. To decide the question as to who is liable to excise duty it is necessary to see who carried out the manufacture and not in whose name the excise registration was or who ca....